EXPAREL Will Benefit From Rising Secular Non-Opioid Demand

AN
AnalystHighTarget
AnalystHighTarget
Not Invested
Consensus Narrative from 5 Analysts
Published
13 May 25
Updated
23 Jul 25
AnalystHighTarget's Fair Value
US$44.00
46.0% undervalued intrinsic discount
23 Jul
US$23.77
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1Y
6.3%
7D
12.7%

Author's Valuation

US$44.0

46.0% undervalued intrinsic discount

AnalystHighTarget Fair Value

Key Takeaways

  • Patent protection, increased adoption, and societal shifts toward non-opioid pain management are driving sustained growth and improved profitability for EXPAREL.
  • Advancing innovative pipeline assets positions the company for transformative launches and future revenue expansion in large, underserved markets.
  • Heavy dependence on one core product, rising costs, pricing pressures, and slow pipeline progress create substantial risks to long-term growth and profitability amid shifting industry dynamics.

Catalysts

About Pacira BioSciences
    Engages in the development, manufacture, marketing, distribution, and sale of non-opioid pain management and regenerative health solutions to healthcare practitioners in the United States.
What are the underlying business or industry changes driving this perspective?
  • The successful settlement of the EXPAREL patent litigation not only gives Pacira exclusivity until 2039 but also removes royalty obligations, providing crucial protection from generics and significantly improving long-term gross margins and cash generation.
  • The rapid early adoption of the NOPAIN reimbursement pathway is expanding access for 18 million outpatient procedures annually, with the prospect of accelerated volume and revenue growth as large commercial plans and integrated delivery networks gradually implement enhanced reimbursement policies.
  • The growing demand for non-opioid pain management—driven by regulatory and societal efforts to curb opioid use—continues to create tailwinds for EXPAREL’s adoption, supporting sustained top-line growth as more hospitals and health systems prioritize opioid-sparing protocols.
  • As the global population ages and the number of surgeries rises, Pacira is positioned to benefit from increased utilization across a broad set of procedures, especially within underpenetrated segments such as outpatient, lower extremity, GI, OB/GYN, and plastics, supporting high single-digit penetration rates and significant runway for future revenue expansion.
  • The advancement of innovative, high-value pipeline assets like PCRX-201 for osteoarthritis, along with the HCAd gene therapy platform, introduces the potential for transformative product launches in very large markets with high unmet medical need, which could drive substantial new revenue streams and enhance long-term earnings growth.

Pacira BioSciences Earnings and Revenue Growth

Pacira BioSciences Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?
  • This narrative explores a more optimistic perspective on Pacira BioSciences compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
  • The bullish analysts are assuming Pacira BioSciences's revenue will grow by 12.0% annually over the next 3 years.
  • The bullish analysts assume that profit margins will increase from -14.8% today to 17.0% in 3 years time.
  • The bullish analysts expect earnings to reach $167.9 million (and earnings per share of $3.63) by about July 2028, up from $-103.7 million today. The analysts are largely in agreement about this estimate.
  • In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 14.5x on those 2028 earnings, up from -10.0x today. This future PE is lower than the current PE for the US Pharmaceuticals industry at 18.1x.
  • Analysts expect the number of shares outstanding to grow by 0.39% per year for the next 3 years.
  • To value all of this in today's terms, we will use a discount rate of 6.4%, as per the Simply Wall St company report.

Pacira BioSciences Future Earnings Per Share Growth

Pacira BioSciences Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?
  • Pacira’s over-reliance on EXPAREL as its core commercial product exposes it to significant risk if clinical guidelines shift, physician adoption wanes, or if generics and biosimilars find a way to challenge its intellectual property before 2039, which could trigger a sharp decline in revenues and pressure earnings.
  • Continued escalation of SG&A and R&D expenses, linked to sales force expansion, commercialization efforts, and pipeline development, has outpaced sales growth in recent quarters; if operational efficiencies do not improve significantly, this ongoing cost growth could compress net margins in the long term.
  • Pricing trends for EXPAREL remain flat to slightly negative with the company acknowledging mid-single-digit pricing pressure from new GPO contracts and increasing pricing scrutiny by payers and governments, which could lead to lower revenue growth and reduced profitability over time.
  • The company’s pipeline strategy is still in early stages with lead programs like PCRX-201 in Phase II, and timelines for approval and commercialization remain long and uncertain; any failure to deliver transformative new products or pipeline setbacks could stunt long-term revenue growth and erode investor confidence.
  • Industry-wide secular trends such as the shift to value-based care, rising adoption of non-pharmaceutical pain management alternatives, and greater regulatory scrutiny could reduce the total addressable market and increase the burden of evidence and compliance costs, ultimately constraining long-term revenues and operating margins for Pacira BioSciences.

Valuation

How have all the factors above been brought together to estimate a fair value?
  • The assumed bullish price target for Pacira BioSciences is $44.0, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of Pacira BioSciences's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
  • However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $44.0, and the most bearish reporting a price target of just $24.0.
  • In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $987.1 million, earnings will come to $167.9 million, and it would be trading on a PE ratio of 14.5x, assuming you use a discount rate of 6.4%.
  • Given the current share price of $22.43, the bullish analyst price target of $44.0 is 49.0% higher.
  • We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

How well do narratives help inform your perspective?

Disclaimer

AnalystHighTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystHighTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystHighTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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