PACIRA BIOSCIENCES, INC. MANAGEMENT REPORT AND ANALYSIS OF FINANCIAL POSITION AND OPERATING RESULTS (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of
Operations is based upon our condensed consolidated financial statements, which
have been prepared in accordance with generally accepted accounting principles
in the United States of America (GAAP) and in accordance with the rules and
regulations of the United States Securities and Exchange Commission, or SEC.

This Quarterly Report on Form 10-Q and certain other communications made by us
contain forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
Private Securities Litigation Reform Act of 1995, including, without limitation,
statements related to: the Flexion Acquisition (as defined below) and the costs
and benefits thereof, our growth and future operating results and trends, our
strategy, plans, objectives, expectations (financial or otherwise) and
intentions, future financial results and growth potential, anticipated product
portfolio, development programs, strategic alliances, patent terms and
intellectual property. For this purpose, any statement that is not a statement
of historical fact should be considered a forward-looking statement. We often
use the words "believe," "anticipate," "plan," "estimate," "expect," "intend,"
"may," "will," "would," "could," "can" and similar expressions to help identify
forward-looking statements. We cannot assure you that our estimates, assumptions
and expectations will prove to have been correct. Actual results may differ
materially from these indicated by such forward-looking statements as a result
of various important factors, including risks relating to, among others: risks
associated with acquisitions, such as the risk that the businesses will not be
integrated successfully, that such integration may be more difficult,
time-consuming or costly than expected or that the expected benefits of the
transaction will not occur; the possibility that if we do not achieve the
perceived benefits of the Flexion Acquisition (as defined below) as rapidly or
to the extent anticipated by financial analysts or investors, the market price
of our shares could decline; the impact of the COVID-19 pandemic on elective
surgeries, our manufacturing and supply chain, global and United States, or
U.S., economic conditions, and our business, including our revenues, financial
condition and results of operations; the success of our sales and manufacturing
efforts in support of the commercialization of EXPAREL® (bupivacaine liposome
injectable suspension), ZILRETTA® (triamcinolone acetonide extended-release
injectable suspension) and iovera°® and the rate and degree of market acceptance
of EXPAREL, ZILRETTA and iovera°; the size and growth of the potential markets
for EXPAREL, ZILRETTA and iovera° and our ability to serve those markets; our
plans to expand the use of EXPAREL, ZILRETTA and iovera° to additional
indications and opportunities, and the timing and success of any related
clinical trials for EXPAREL, ZILRETTA and iovera°; the commercial success of
EXPAREL, ZILRETTA and iovera°; the related timing and success of United States
Food and Drug Administration, or FDA, supplemental New Drug Applications, or
sNDAs, and premarket notification 510(k)s; the related timing and success of
European Medicines Agency, or EMA, Marketing Authorization Applications, or MAA;
our plans to evaluate, develop and pursue additional product candidates
utilizing our proprietary multivesicular liposome, or pMVL, drug delivery
technology; the approval of the commercialization of our products in other
jurisdictions; clinical trials in support of an existing or potential pMVL-based
product; our commercialization and marketing capabilities, our ability to
successfully construct an additional EXPAREL manufacturing suite in San Diego,
California; our ability to successfully complete a ZILRETTA capacity expansion
project in Swindon, England; the outcome of any litigation; the ability to
successfully integrate Flexion or any future acquisitions into our existing
business; the recoverability of our deferred tax assets; and assumptions
associated with contingent consideration payments. Important factors could cause
our actual results to differ materially from those indicated or implied by
forward-looking statements, and as such we anticipate that subsequent events and
developments will cause our views to change. Except as required by applicable
law, we undertake no intention or obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise, and readers should not rely on the forward-looking
statements as representing our views as of any date subsequent to the date of
the filing of this Quarterly Report on Form 10-Q.

These forward-looking statements involve known and unknown risks, uncertainties
and other factors that may cause our actual results, levels of activity,
performance or achievements to differ materially from those expressed or implied
by these statements. These factors include items mentioned herein and the
matters discussed and referenced in Part I-Item 1A. "Risk Factors" included in
our   Annual Report on Form 10-K for the year ended December 31, 2021   and in
other reports as filed with the SEC.

Unless the context otherwise requires, references to “Pacira”, “we”, the “Company”, “us” and “our” in this Quarterly Report on Form 10-Q are to Pacira BioSciences, Inc. and its subsidiaries.

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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. 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. 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. 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. Since its initial
approval in 2011, more than 10 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 (the "Flexion Acquisition") of Flexion Therapeutics, Inc.
("Flexion") 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 osteoarthritis, or 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 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 only to targeted nerves, which we sell directly to end users. The
iovera° system is highly complementary to EXPAREL as a non-opioid therapy that
alleviates pain by disrupting pain signals being transmitted to the brain from
the site of injury or surgery. We also believe ZILRETTA is highly complementary
to iovera°.

We expect to continue to pursue the expanded use of EXPAREL, ZILRETTA and
iovera° in additional procedures; progress our earlier-stage product candidate
pipeline; advance regulatory activities for EXPAREL, ZILRETTA, iovera° and other
product candidates; invest in sales and marketing resources for EXPAREL,
ZILRETTA and iovera°; expand and enhance our manufacturing capacity for EXPAREL,
ZILRETTA and iovera°; invest in products, businesses and technologies; and
support legal matters.

Flexion Acquisition

In November 2021, we completed the Flexion Acquisition pursuant to an Agreement
and Plan of Merger (the "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. 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.

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 to repay Flexion debt that was 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. The 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. Each CVR entitles Flexion shareholders to contingent milestone
payments of up to an aggregate of $8.00 in cash per share of Flexion common
stock if certain milestones are met on or prior to December 31, 2030. Up to an
additional $380.2 million in the aggregate may be payable to holders of the CVRs
if each of the applicable milestones are achieved. For more information, see
Note 4, Flexion Acquisition, to our condensed consolidated financial statements
included herein.

Coronavirus pandemic (COVID-19)

Since early 2020, our revenues have been impacted by the global pandemic caused
by a novel strain of coronavirus (COVID-19) and pandemic-related challenges that
included the significant postponement or suspension in the scheduling of
elective surgical procedures due to public health guidance and government
directives. While the degree of impact has diminished during the course of the
pandemic due to the introduction of vaccines and therapeutics, as well as the
lessening of elective surgery restrictions, certain pandemic-related operational
and staffing challenges persist. For instance, while many restrictions have
since eased with COVID-19 vaccines now widely available, the elective surgery
market faced additional pandemic-related challenges in August and September 2021
due to regional surges in COVID-19 variant cases, staffing shortages and fatigue
from care teams addressing significant procedure backlogs, and in December 2021,
the COVID-19 Omicron variant prompted some government restrictions on elective
surgical procedures and created surgical staffing challenges, both of which
began to ease in January 2022. Our manufacturing sites are operational and have
safety protocols and

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guidelines as recommended by federal, state and local governments. Indirect
effects of the pandemic may include longer lead-times for or the inability to
secure a sufficient supply of materials due to the prioritization by certain
suppliers for COVID-19 vaccine manufacturing. The situation remains dynamic and
subject to rapid and possibly material changes. Additional negative impacts may
also arise from the COVID-19 pandemic 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.

We will continue to actively monitor the situation and implement measures
recommended by federal, state or local authorities, or that we determine are in
the best interests of our patients, employees, partners, suppliers, shareholders
and stakeholders. For a description of risks facing us that relate to the
COVID-19 pandemic or any other future pandemic, epidemic or outbreak of
contagious disease, see our   Annual Report on Form 10-K for the year ended
December 31, 2021  .

Recent Highlights

• In April 2022, the U.S. Patent and Trademark Office issued Patent Nos.
11,304,904, and 11,311,486. The '904 and '486 patents have an expiration date of
January 22, 2041 and are listed in the FDA Approved Drug Products with
Therapeutic Equivalence Evaluations (the "Orange Book"). With these two new
patents, there are currently five EXPAREL patents listed in the Orange Book each
with an expiration date of January 22, 2041.

• We recently launched development plans for our second training facility in
Houston, Texas. This 19,000 square-feet state-of-the-art facility will feature
an adaptive lecture hall, broadcast studio and lab space for cadaver and other
interactive workshops. Together with our Tampa facility, this second training
center will play a core role in developing physician champions and
community-based clinicians who want to stay on the forefront of opioid-sparing
pain management. We expect to open the Houston facility before the end of 2022
to host programs for EXPAREL, ZILRETTA and iovera°.

EXPARE

In the U.S., EXPAREL is currently indicated in patients six years of age and
older for single-dose infiltration to produce postsurgical local analgesia, and
in adults as an interscalene brachial plexus nerve block to produce postsurgical
regional analgesia. Safety and efficacy have not been established in other nerve
blocks. In the E.U., EXPAREL is indicated as a brachial plexus block and 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.

EXPAREL label and global expansion

•Lower extremity nerve block. We are advancing two Phase 3 studies of EXPAREL as
a nerve block in lower extremity surgeries. One is a popliteal sciatic nerve
block for bunionectomy and the second is an adductor canal block for total knee
arthroplasty, or TKA. We believe positive results from these studies will form
the basis for an sNDA submission seeking label expansion to include lower
extremity nerve blocks. We believe the addition of this indication is
significant as anesthesia-driven regional approaches using nerve and field
blocks continue to expand as institutional protocols.

•Pediatrics. We are working with the FDA to finalize our studies to support
expansion of the EXPAREL single-dose infiltration label to include patients
under six years of age. We have met with the FDA to discuss appropriate studies
of EXPAREL in pediatric patients aged 0 to less than 6 years of age. We expect
that these studies, if successful, will be the basis for an sNDA seeking
expansion of the EXPAREL label to include this patient population for
single-dose infiltration. We are also discussing our regulatory strategy for
EXPAREL administered as a nerve block in the pediatric setting. We are working
with both the FDA and the European Medicines Agency, or EMA, with the goal of
harmonizing our pediatric clinical studies as much as possible between the two
regions.

•Stellate ganglion block. We believe a long-acting stellate ganglion block with
EXPAREL has the potential to be an effective approach for managing ventricular
tachycardia (commonly referred to as "electrical storm"), a life-threatening
clinical condition characterized by the recurrence of hemodynamically unstable
ventricular tachycardia and/or ventricular fibrillation. We are planning a
multi-center registration study to evaluate EXPAREL as a stellate ganglion block
for managing electrical storm. We are also supporting an investigator-initiated
study that will evaluate iovera° as a longer-acting stellate ganglion block.

•Global expansion. We have prioritized the European and Latin American markets
for global expansion. In Europe, we were granted marketing authorization by the
EC in November 2020 for EXPAREL as a brachial plexus block or femoral nerve
block for treatment of post-operating pain in adults and as a field block for
treatment of somatic post-
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operative pain from small- to medium-sized surgical wounds in adults. 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.
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.

ZILRETTA

ZILRETTA was approved by the FDA in October 2017 and launched in the U.S.
shortly thereafter. We market ZILRETTA through our ZILRETTA and iovera° sales
force of approximately 50 Treatment Solutions Managers who are providing
clinicians with two unique OA treatment options to individualize patient care.
ZILRETTA is the first and only extended-release, intra-articular therapy for
patients confronting OA knee pain. ZILRETTA employs a proprietary microsphere
technology combining triamcinolone acetonide, or TA, a commonly administered,
immediate-release corticosteroid, with a poly lactic-co-glycolic acid, or PLGA,
matrix to provide extended pain relief. PLGA is a proven extended-release
delivery vehicle that is metabolized to carbon dioxide and water as it releases
drug in the IA space and is used in other approved drug products and surgical
devices. The ZILRETTA microspheres slowly and continuously release triamcinolone
acetonide into the knee to provide significant pain relief for 12 weeks, with
some people experiencing pain relief through 16 weeks.

We believe ZILRETTA's extended-release profile may also provide effective
treatment for OA pain of the shoulder, and we intend to initiate a Phase 3 trial
investigating ZILRETTA in shoulder OA in 2023 after aligning with the FDA on
study design. In addition, we are planning a comparative safety study of
ZILRETTA in patients with Type 2 diabetes and are evaluating a repeat dosing
study.

ZILRETTA Clinical Benefits

ZILRETTA combines a commonly administered steroid, TA, with PLGA, delivering a
32 milligram dose of TA to provide extended therapeutic concentrations in the
joint and persistent analgesic effect.

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. The
pivotal Phase 3 trial, on which the approval of ZILRETTA was based, showed that
ZILRETTA significantly reduced OA knee pain for 12 weeks, with some people
experiencing pain relief through Week 16. Both the magnitude and duration of
pain relief provided by ZILRETTA in clinical trials were clinically meaningful
with the magnitude of pain relief amongst the largest seen to date in OA
clinical trials. The overall frequency of treatment-related adverse events in
these trials was similar to those observed with placebo, and no drug-related
serious adverse events were reported. We believe that ZILRETTA holds the
potential to become the corticosteroid of choice given its safety and efficacy
profile, and the fact that it is the first and only extended-release
corticosteroid on the market. In September 2021, the American Association of
Orthopaedic Surgeons, or AAOS, updated its evidence-based clinical practice
guidelines, finding ZILRETTA can improve patient outcomes over traditional
immediate-release corticosteroids.

iover°

The iovera° system is an FDA-approved, non-opioid handheld cryoanalgesia device
used to produce precise, controlled doses of cold temperature only to targeted
nerves. It has been FDA 510(k) cleared in the U.S., has a CE mark in the E.U.
and is cleared for marketing in Canada for the blocking of pain. We believe the
iovera° system is highly complementary to EXPAREL and ZILRETTA as a non-opioid
therapy that alleviates pain using a non-pharmacological nerve block to disrupt
pain signals being transmitted to the brain from the site of injury or surgery.
It is also indicated for the relief of pain and symptoms associated with
arthritis of the knee for up to 90 days.

iovera° Clinical Benefits

There is a growing body of clinical data demonstrating success with iovera°
treatment for OA of the knee. 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°.

Preliminary results demonstrated reductions in opioids, including:

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•The daily morphine equivalent consumption in the per protocol group analysis
was significantly lower at 72 hours (p<0.05), 6 weeks (p<0.05) and 12 weeks
(p<0.05).

•Patients who were administered iovera° were far less likely to take opioids six
weeks after surgery. The number of patients taking opioids six weeks after TKA
in the control group was three times the number of patients taking opioids in
the cryoanalgesia group (14% vs. 44%, p<0.01).

•Patients in the iovera° group demonstrated a statistically significant reduction in pain scores compared to 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 damaging the surrounding tissues;

•iovera° is a convenient handheld device with a single-use, procedure-specific Smart Tip; and

•iovera° can be delivered with precision using ultrasound guidance or an anatomical landmark.

In September 2021the AAOS has updated its evidence-based clinical practice guidelines, reporting that denervation therapy, including cryoneurolysis, may reduce knee pain and improve function in patients with symptomatic knee osteoarthritis .

We are also encouraged by usage of iovera° in other areas. Key opinion leaders
in orthopedics, spine and anesthesia are interested in replacing heat-based
radiofrequency ablation with iovera° cold therapy. There is interest across a
wide range of treatment opportunities such as low back pain, spine, spasticity
and rib fracture. We intend to use investigator-initiated studies and grants to
develop data across these areas.

iovera° Global expansion

In July 2021, we entered into a licensing agreement with Verve Medical Products,
Inc. for the distribution of iovera° in Canada. We began selling iovera° in
Canada in the fourth quarter of 2021. Additionally, we began selling iovera° in
the E.U. through a contracted sales force in the first quarter of 2022.

The osteoarthritis market

OA is the most common form of arthritis. It is also called degenerative joint
disease and occurs most frequently in the hands, hips and knees. With OA, the
cartilage within a joint begins to break down and the underlying bone begins to
change. These changes usually develop slowly and get worse over time. OA can
cause pain, stiffness and swelling. In some cases it also causes reduced
function and disability; some people are no longer able to do daily tasks or
work. According to the CDC, OA affects over 32.5 million adults in the U.S.

The lifetime risk of developing symptomatic knee OA is 45 percent. The
prevalence of symptomatic knee OA increases with each decade of life, with the
annual incidence of knee OA being highest between age 55 and 64 years old. There
are 14 million individuals in the U.S. who have symptomatic knee OA, and nearly
two million are under the age of 45. Surgical intervention is typically a last
resort for patients suffering from OA of the knee.

With the addition of ZILRETTA to our product offering, we can now offer
clinicians the flexibility to individualize OA knee pain treatment with either
ZILRETTA or a drug-free nerve block with iovera° based on patient factors and
preference, physician training, site of care and reimbursement considerations.


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Clinical Development Programs

PCRX-201 and PCRX-301 (formerly FX-201 and FX-301)

PCRX-201 and PCRX-301 were added to our portfolio as part of the Flexion
Acquisition. PCRX-201 is a gene therapy product candidate designed to provide
"on demand" production of an anti-inflammatory protein, interleukin-1 receptor
antagonist (IL-1Ra) whenever inflammation is detected in the joint. PCRX-301, is
a locally administered NaV1.7 inhibitor, known as funapide, formulated for
extended release in a thermosensitive hydrogel. The initial development of
PCRX-301 was intended to support administration as a peripheral analgesic lower
extremity nerve block for management of post-operative pain.

Clinical programs based on pMVL

Given the proven safety, flexibility and customizability of our pMVL drug
delivery technology platform for acute, sub-acute and chronic pain applications,
we have several pMVL-based products in clinical development. Following data
readouts from preclinical and feasibility studies for these candidates, we have
prioritized three programs for clinical development: (i) PCRX-401, a
dexamethasone-pMVL for low back pain; (ii) PCRX-501, a high-dose
bupivacaine-pMVL for extended pain relief and (iii) a low-dose bupivacaine-pMVL
for intrathecal analgesia. We are planning to initiate a Phase 2 study for
low-dose bupivacaine-pMVL for intrathecal analgesia in late 2022.

External innovation

In parallel to our internal clinical programs, our business development team
continues to pursue 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. We are using a combination
of strategic investments, in-licensing and acquisition transactions to build out
a pipeline of innovation to improve patients' journeys along the neural pain
pathway. Select strategic investments we have made to support promising early
stage platforms are summarized below.

             Company                 Development Stage          Description of Platform Technology          Potential Therapeutic
                                                                                                                    Areas
                                                           CX-011, an

intra-articular injection designed

         Carthronix, Inc.               Preclinical        to slow joint degeneration by mediating IL-6            Knee OA
                                                                            

cytokines

                                                           Chemogenetic 

platform to reverse the outlier

     Coda Therapeutics, Inc.            Preclinical          neuronal 

underlying neurological activity Neuropathic pain

                                                            disorders using optimized Adeno-Associated
                                                                        Virus (AAV) vectors
      Genascence Corporation              Phase 1             AAV vector-based gene therapy targeting              Knee OA
                                                            Interleukin 1 

Receptor antagonist (IL-1Ra)

                                                            Next-generation 

gene transfer vehicles than OA and others

GeneQuine Biotherapeutics GmbH Preclinical enters joint cells to confer multi-year genetic musculoskeletal disorders

                                                                            expression
                                                          Remedisc 7-amino acid chain peptide that binds
       Spine BioPharma, LLC            Phase 3-ready      to and induces

downregulation of degenerative disc disease transformation

                                                                   growth factor, beta 1 (TGF?1)



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Product Portfolio and Internal Pipeline

Our current product portfolio and internal product candidate pipeline, along
with anticipated milestones over the next 12 to 18 months, are summarized in the
table below:

[[Image Removed: pcrx-20220331_g2.jpg]]
* Study designs have not been finalized for infiltration in pediatric patients
aged 0 to 6 years old or for nerve block in pediatric patients.
- NOCITA® is a registered trademark of Aratana Therapeutics, Inc., a wholly
owned subsidiary of Elanco Animal Health, Inc.


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Pacira Innovation and Training Center of Tampa

In October 2020, we opened the Pacira Innovation and Training center of Tampa
(the "PITT"). We designed this facility to help advance clinician understanding
of the latest local, regional and field block approaches for managing pain. The
PITT provides an unparalleled training environment for healthcare providers
working to reduce or eliminate patient exposure to opioids. The PITT 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 corporate headquarters are also
located at the PITT.

The PITT consists of approximately 13,000 square-feet of fully adaptable space
and is equipped with state-of-the-art technology and audio/visual capabilities
and features several distinct training spaces including a simulation lab
equipped with seven ultrasound scanning stations; a lecture hall featuring a
4½-foot tall by 24-foot wide liquid crystal display video wall to support live,
virtual and even global presentations; and a green-screen broadcast studio
designed to livestream content with single or multiple hosts.

In addition to our EXPAREL programs, we are hosting ongoing workshops to train
new users on best practice techniques for iovera° administration at the PITT.
Led by healthcare professionals, these labs include didactic lectures and
hands-on trainings including live model nerve scanning and identification using
ultrasound and peripheral nerve stimulation.

At no cost to the organization, PITT also serves as a venue for national anesthesia provider organizations to hold their own workshops and training sessions to educate healthcare providers.

We have launched development plans for a second training facility in Houston,
Texas. This 19,000 square-foot state-of-the-art facility will feature an
adaptive lecture hall, broadcast studio and lab space for cadaver and other
interactive workshops. These training centers are core to developing both our
physician champions and community-based clinicians who want to stay on the
forefront of opioid-sparing pain management. We expect to open this facility
before the end of 2022 which would immediately double our capacity and ability
to host programs for EXPAREL, ZILRETTA and iovera°.

Operating results

Comparison of the three months ended March 31, 2022 and 2021

Revenue

Net product sales consist of (i) EXPAREL in the U.S., the European Union, or
E.U., and the United Kingdom, or U.K.; (ii) ZILRETTA in the U.S.; (iii) iovera°
in the U.S., Canada and the E.U. and (iv) sales of, and royalties on, our
bupivacaine liposome injectable suspension for veterinary use.

The following table provides information about our revenues during the periods indicated, including percentage changes (amounts in thousands of dollars):

Three months completed

March, 31st% Increase /

                                                                          2022                2021     (Decrease)
Net product sales:
EXPAREL                                                                         $ 129,205            $   114,678             13%
ZILRETTA                                                                           23,635                      -             N/A
iovera°                                                                             3,026                  3,268             (7)%
Bupivacaine liposome injectable suspension                                          1,556                    792             96%
Total net product sales                                                           157,422                118,738             33%
Royalty revenue                                                                       569                    289             97%

Total revenues                                                                  $ 157,991            $   119,027             33%


EXPAREL revenue increased 13% in the three months ended March 31, 2022 versus
2021 primarily due to increases of 11% in gross vial volume and increases of 4%
in gross selling price per unit, partially offset by the sales mix of EXPAREL
vial sizes. Although the demand for EXPAREL has continued to increase primarily
as a result of Ambulatory Surgical Centers and anesthesiologists broadening the
use of long-acting EXPAREL regional approaches as a foundation of multimodal
opioid-minimization strategies that enable shifting inpatient procedures to
23-hour sites of care, the elective surgery market faced
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additional pandemic-related challenges in January 2022 due to regional surges in
COVID-19 variant cases, staffing shortages and fatigue from care teams
addressing significant procedure backlogs. EXPAREL utilization remains above the
overall sharp decline in elective surgical procedures relative to pre-pandemic
baseline levels due to increased utilization in outpatient settings and emergent
procedures.

Following the acquisition of Flexion, we acquired ZILRETTA in November 2021, which is an extended-release corticosteroid treatment for knee pain related to osteoarthritis. We recognized the net sales of products from $23.6 million for the three months ended
March 31, 2022.

Net product sales of iovera° decreased 7% in the three months ended March 31,
2022 versus 2021 primarily due to a delay in the transition from generation 1 to
generation 2 iovera° products and short-term variations in reimbursement
policies in certain territories.

Net sales of bupivacaine liposome suspension for injection products and associated royalties increased 96% and 97%, respectively, in the three months ended
March 31, 2022 compared to 2021 due to the timing of orders placed by Aratana Therapeutics, Inc. for veterinary use.

Any renewed government suspension of or reluctance of patients to have elective
procedures would impact our future sales of EXPAREL, ZILRETTA and iovera° during
the ongoing COVID-19 pandemic.

The following tables provide a summary of activity with respect to our sales
related allowances and accruals related to EXPAREL and ZILRETTA for the three
months ended March 31, 2022 and 2021 (in thousands):

                                                                                                        Volume
                                           Returns           Prompt Payment         Service           Rebates and           Government
March 31, 2022                           Allowances             Discounts             Fees            Chargebacks             Rebates              Total
Balance at December 31, 2021           $      3,361          $      1,178          $ 3,636          $      3,494          $        761          $ 12,430
Provision                                       404                 2,655            3,949                 9,392                   348            16,748
Payments / Adjustments                         (856)               (2,608)          (4,031)               (8,473)                 (401)          (16,369)
Balance at March 31, 2022              $      2,909          $      1,225          $ 3,554          $      4,413          $        708          $ 12,809


                                                                                                        Volume
                                           Returns           Prompt Payment         Service           Rebates and           Government
March 31, 2021                           Allowances             Discounts             Fees            Chargebacks            Rebates             Total
Balance at December 31, 2020           $      1,023          $      1,007          $ 1,168          $      1,600          $         -          $ 4,798
Provision                                       249                 2,365            1,785                 2,726                    -            7,125
Payments / Adjustments                         (111)               (2,349)          (1,953)               (2,582)                   -           (6,995)
Balance at March 31, 2021              $      1,161          $      1,023          $ 1,000          $      1,744          $         -          $ 4,928


Total reductions of gross product sales from sales-related allowances and
accruals were $16.7 million and $7.1 million, or 9.7% and 5.7% of gross product
sales, for the three months ended March 31, 2022 and 2021, respectively. The
overall increase in sales-related allowances and accruals as a percentage of
gross product sales was directly related to the addition of the ZILRETTA-related
allowances and accruals.
             Pacira BioSciences, Inc. | Q1 2022 Form 10-Q | Page 38

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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.

The following table provides information regarding our cost of goods sold and
gross margin during the periods indicated, including percent changes (dollar
amounts in thousands):

                                                                              Three Months Ended
                                                                               March 31,           % Increase /
                                                                                   2022              2021      (Decrease)
 Cost of goods sold                                                        
              $  36,074         $         31,349          15%
 Gross margin                                                                                 77  %                    74  %


Gross margin increased three percentage points in the three months ended March
31, 2022 versus 2021, mainly due to lower cost of EXPAREL product sold due to
higher production levels and downtime that occurred in 2021, partially offset by
the ZILRETTA step-up of fixed assets and inventory to fair value in purchase
accounting.

Research and development costs

Research and development expenses primarily consist of costs related to clinical
trials and related outside services, product development and other research and
development costs, including trials that we are conducting to generate new data
for EXPAREL, ZILRETTA and iovera° and stock-based compensation expense. Clinical
and preclinical development expenses include costs for clinical personnel,
clinical trials performed by third-parties, toxicology studies, materials and
supplies, database management and other third-party fees. Product development
and manufacturing capacity expansion expenses include development costs for our
products, which include personnel, equipment, materials and contractor costs for
process development and product candidates, development costs related to
significant scale-ups of our manufacturing capacity and facility costs for our
research space. Regulatory and other expenses include regulatory activities
related to unapproved products and indications, medical information 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 following table provides a breakdown of our research and development expenditures during the periods indicated, including percentage changes (amounts in thousands of dollars):

Three months completed

                                                                          March 31,           % Increase /
                                                                              2022              2021      (Decrease)
Clinical and preclinical development                                        

$13,440 $8,020 68% Product development and manufacturing capacity expansion

             4,993                    4,702           6%
Regulatory and other                                                                     1,714                    2,051         (16)%
Stock-based compensation                                                                 1,458                    1,106          32%
  Total research and development expense                                             $  21,605         $         15,879          36%
 % of total revenues                                                                     14  %                    13  %

Total research and development expenditure increased by 36% in the three months ended
March 31, 2022 against 2021.

Clinical and preclinical development expense increased 68% in the three months
ended March 31, 2022 versus 2021 due to the start-up of and continued enrollment
in two EXPAREL lower extremity nerve block trials in bunionectomy and TKA and
ongoing trials for the product candidates acquired as part of the Flexion
Acquisition.

Product development and manufacturing capacity expansion expense increased 6% in
the three months ended March 31, 2022 versus 2021 mainly attributable to the
scale-up of our manufacturing capacity at our Science Center Campus in San
Diego, California.

Regulatory and other expense decreased 16% in the three months ended March 31,
2022 versus 2021 due lower ongoing costs in the first quarter 2022 related to
our iovera° clinical data registry, as compared to start-up expenses incurred in
the first quarter of 2021.
             Pacira BioSciences, Inc. | Q1 2022 Form 10-Q | Page 39

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Stock-based compensation increased 32% in the three months ended March 31, 2022
versus 2021 primarily due to greater equity awards outstanding for research and
development personnel.

Selling, general and administrative expenses

Sales and marketing expenses primarily consist of compensation and benefits for
our sales force and personnel that support our sales, marketing, medical and
scientific affairs operations, payments to our marketing partners for the
promotion and sale of our products, expenses related to communicating the health
outcome benefits of our products, investments in provider-level market access
and patient reimbursement support and educational programs for our customers.
General and administrative expenses consist of compensation and benefits for
legal, finance, regulatory activities related to approved products and
indications, compliance, information technology, human resources, business
development, executive management and other supporting personnel. It also
includes professional fees for legal, audit, tax and consulting services.
Stock-based compensation expense relates to the costs of stock option grants,
RSU awards and our ESPP.

The following table provides information about our selling, general and administrative expenses during the periods indicated, including percentage changes (amounts in thousands of dollars):

Three months completed

                                                                            March 31,           % Increase /
                                                                                2022              2021      (Decrease)
 Sales and marketing                                                                   $  38,440         $         27,102          42%
 General and administrative                                                               17,441                   13,868          26%
 Stock-based compensation                                                                  8,379                    7,552          11%
  Total selling, general and administrative expense                                    $  64,260         $         48,522          32%
 % of total revenues                                                                       41  %                    41  %

Total selling, general and administrative expenses increased by 32% in the quarter ended March 31, 2022 against 2021.

Sales and marketing expenses increased 42% in the three months ended March 31,
2022 versus 2021. The increases were driven by a sales force expansion
supporting iovera°, the addition of a sales force to support ZILRETTA and fully
staffing a contracted sales force in Europe. We are continuing our marketing
investment in EXPAREL and iovera°, 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 continue our investment in clinician
training in the use of EXPAREL and iovera° at our PITT training facility in
Tampa, Florida. We expect that the addition of ZILRETTA to our commercial
portfolio will increase our sales and marketing spend in 2022 as we increase the
size of our ZILRETTA and iovera° sales force, which is providing clinicians with
two unique OA treatment options to individualize patient care and patient
reimbursement support for ZILRETTA.

General and administrative expenses increased 26% in the three months ended
March 31, 2022 versus 2021 due to administrative support costs as a result of
the Flexion Acquisition in November 2021, legal costs to support intellectual
property protection and additional support for our expansion into European
markets.

Stock-based compensation increased 11% in the three months ended March 31, 2022
and 2021 primarily due to an increase in the number of equity awards outstanding
for selling, general and administrative personnel.

Amortization of acquired intangible assets

The following table provides a summary of the amortization of intangible assets acquired during the periods indicated, including percentage changes (amounts in thousands of dollars):

Three months completed

March, 31st% Increase /

                                                                              2022                2021      (Decrease)
 Amortization of acquired intangible assets                                          $ 14,322            $       1,967            100% +


Amortization of acquired intangible assets increased substantially in the three
months ended March 31, 2022 versus 2021 due to the Flexion Acquisition. We
acquired a developed technology intangible asset for ZILRETTA for OA knee pain,
which is being amortized over a useful life of approximately ten years. For more
information, see Note 4, Flexion Acquisition, and Note 8, Goodwill and
Intangible Assets, to our condensed consolidated financial statements included
herein.

             Pacira BioSciences, Inc. | Q1 2022 Form 10-Q | Page 40
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  Table of Contents
Acquisition-Related Charges, Product Discontinuation and Other

The following table provides a summary of the costs related to the Flexion acquisition, the MyoScience acquisition, termination costs and other activities during the periods indicated, including percentage changes (amounts in thousands of dollars) :

                                                                               Three Months Ended
                                                                                 March 31,        % Increase /
                                                                                  2022               2021     (Decrease)
Acquisition-related charges (gains)                                                      $ 4,337            $     (1,127)             N/A

Other                                                                                          -                   3,000            (100)%

Total acquisition, product discontinuation and other expenses

                                                                                    $ 4,337            $      1,873            100% +


During the three months ended March 31, 2022, we recognized acquisition-related
charges of $4.3 million. These charges are primarily driven 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,
which were partially offset by credits from changes in the fair value of
contingent consideration related to the Flexion Acquisition and MyoScience
Acquisition. For more information, see Note 15, Acquisition-Related Charges,
Product Discontinuation and Other, to our condensed consolidated financial
statements included herein.

In the three months ended March 31, 2021, as part of the MyoScience Acquisition,
we recognized gains in the amount of $1.1 million related to changes in the fair
value of contingent consideration. See Note 10, Financial Instruments, to our
condensed consolidated financial statements included herein, for information
regarding the methods and key assumptions used in the fair value measurements of
contingent consideration.

In June 2018, we entered into an agreement with Nuance Biotech Co. Ltd. to
advance the development and commercialization of EXPAREL in China. In April
2021, we agreed to a mutual termination of the agreement due to the lack of a
viable regulatory pathway that adequately safeguarded our intellectual property
against the risk of a generic product. Dissolution costs of $3.0 million were
included in other operating expenses in the condensed consolidated statements of
operations for the three months ended March 31, 2021.

Other income (expenses)

The following table provides information on other expenses, net during the periods indicated, including percentage changes (amounts in thousands of dollars):

                                                                      Three Months Ended
                                                                        March 31,         % Increase /
                                                                        2022                 2021     (Decrease)
 Interest income                                                               $     271            $        415              (35)%
 Interest expense                                                                (10,246)                 (6,971)              47%

 Other, net                                                                         (124)                   (157)             (21)%
   Total other expense, net                                                    $ (10,099)           $     (6,713)              50%


Total other expense, net increased 50% in the three months ended March 31, 2022
versus 2021 primarily due to the increase in interest expense. The 47% increase
in interest expense during the three months ended March 31, 2022 was due to the
$375.0 million term loan B credit agreement (the "Term Loan") entered into in
December 2021. This increase was partially offset by the absence of debt
discount amortization associated with our convertible notes in the current year
due to adopting Accounting Standards Update, or ASU, 2020-06 in 2022. For
additional information regarding the adoption of ASU 2020-06, see Note 2,
Summary of Significant Accounting Policies, to our condensed consolidated
financial statements herein.
             Pacira BioSciences, Inc. | Q1 2022 Form 10-Q | Page 41

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Contents

income tax expense

The following table provides information regarding our income tax expense during
the periods indicated, including percent changes (dollar amounts in thousands):
                                          Three Months Ended
                                           March 31,
                                                    2022            2021   % Increase / (Decrease)
 Income tax expense                                       $ 466           $               2,355          (80)%
 Effective tax rate                                           6  %                           19    %


For the three months ended March 31, 2022 and 2021, we recorded income tax
expense of $0.5 million and $2.4 million, respectively, which represented the
estimated annual effective tax rate applied to the year-to-date domestic
operating results adjusted for certain discrete tax benefits related to equity
compensation.

Cash 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. In
addition, we acquired ZILRETTA as part of the Flexion Acquisition in November
2021 and iovera° as part of the MyoScience Acquisition in April 2019. We are
primarily dependent on the commercial success of EXPAREL and ZILRETTA. We have
financed our operations primarily with the proceeds from the sale of convertible
senior notes and other debt, common stock, product sales and collaborative
licensing and milestone revenue. As of March 31, 2022, we had an accumulated
deficit of $157.8 million, cash and cash equivalents and short-term
available-for-sale investments of $452.2 million and working capital of $361.9
million.

The COVID-19 pandemic could continue to result in a reduction of certain
commercial and clinical expenditures which could offset a portion of the
potential revenue declines caused by the COVID-19 pandemic. We currently expect
that our cash, short-term and long-term investments on hand will be adequate to
cover any potential 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. The CARES Act, among other
things, allows for certain measures to increase liquidity for businesses such as
the deferral of employer payroll taxes, a tax credit for retaining employees and
other provisions. We benefited from the provision to defer the payment of
certain employer payroll taxes in the amount of $2.8 million for the year ended
December 31, 2020 and remitted $1.4 million in December 2021. The remaining $1.4
million is due by December 31, 2022.

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