Policy Changes And Partnerships Will Expand Ambulatory Market Reach

Published
24 Sep 24
Updated
17 Aug 25
AnalystConsensusTarget's Fair Value
US$29.00
14.2% undervalued intrinsic discount
17 Aug
US$24.89
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1Y
78.0%
7D
-1.2%

Author's Valuation

US$29.0

14.2% undervalued intrinsic discount

AnalystConsensusTarget Fair Value

Last Update17 Aug 25
Fair value Decreased 5.23%

The slight decrease in consensus revenue growth expectations and a lower future P/E multiple have led analysts to reduce their fair value estimate for Pacira BioSciences from $30.60 to $29.00.


What's in the News


  • Pacira completed a $50.04 million buyback, repurchasing 1,955,589 shares (4.23%) under its May 2025 authorization and previously completed a $25 million buyback (837,240 shares, 1.8%) under its May 2024 authorization.
  • Earnings guidance for FY2025 narrowed to $730–750 million in total revenue, from a prior range of $725–765 million.
  • Formed a strategic collaboration with Johnson & Johnson MedTech to co-promote ZILRETTA®, expanding its reach beyond orthopedics into specialties such as sports medicine, pain management, and rheumatology.
  • Announced positive, long-term Phase 1 results for PCRX-201, a gene therapy candidate for osteoarthritis of the knee, with sustained pain and function improvement over three years and regulatory designations (RMAT and ATMP) in the U.S. and Europe; Phase 2 dosing underway.
  • Pacira was dropped from the Russell 2000 Defensive, Growth-Defensive, and Value-Defensive indices.

Valuation Changes


Summary of Valuation Changes for Pacira BioSciences

  • The Consensus Analyst Price Target has fallen from $30.60 to $29.00.
  • The Future P/E for Pacira BioSciences has fallen from 13.63x to 12.92x.
  • The Consensus Revenue Growth forecasts for Pacira BioSciences has fallen slightly from 9.2% per annum to 8.8% per annum.

Key Takeaways

  • Increased adoption of non-opioid solutions and expanded outpatient procedure coverage are expected to drive sustained revenue growth for the company.
  • Strategic partnerships, manufacturing efficiencies, and clinical pipeline progress support margin improvement and innovation-driven expansion into new markets.
  • Heavy reliance on EXPAREL, slow market adoption, pricing pressures, R&D uncertainties, and partnership execution risks could constrain long-term revenue growth and profitability.

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?
  • Recent CMS policy changes phasing out the inpatient-only list and expanding coverage for procedures in ambulatory surgery centers are expected to increase the use of Pacira's EXPAREL in outpatient surgical settings-an area poised for growth as surgery volumes in these settings outpace inpatient procedures-supporting top-line revenue growth in coming years.
  • Accelerated adoption of non-opioid pain management solutions due to mounting public and regulatory pressure to reduce opioid use is driving increasing formulary wins, broader commercial payer coverage (targeting 100 million covered lives by year-end), and institutional demand for EXPAREL, which is likely to sustain and expand revenue growth.
  • The new strategic partnership with Johnson & Johnson MedTech for ZILRETTA is expected to double sales coverage and significantly expand reach across new physician specialties and healthcare systems, providing a forward catalyst for revenue growth in 2026 and beyond.
  • Ongoing investments in manufacturing efficiency-including the commissioning of large-scale, lower-cost production suites and optimization of workforce-are driving higher gross margins (guidance raised to 78%-80%), which, combined with reduced operating expenses, should translate to improved net margins and long-term earnings growth.
  • Progress in the clinical pipeline (e.g., PCRX-201 advancing through phase II, iovera° registrational studies, and real-world data from the iGOR registry) positions Pacira to capitalize on innovation-driven expansion into new indications and patient populations, which could diversify future revenue streams and reduce risk dependence on a single product.

Pacira BioSciences Earnings and Revenue Growth

Pacira BioSciences Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?
  • Analysts are assuming Pacira BioSciences's revenue will grow by 9.2% annually over the next 3 years.
  • Analysts assume that profit margins will increase from -18.1% today to 12.2% in 3 years time.
  • Analysts expect earnings to reach $112.0 million (and earnings per share of $2.38) by about August 2028, up from $-127.5 million today.
  • In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 13.6x on those 2028 earnings, up from -8.8x today. This future PE is lower than the current PE for the US Pharmaceuticals industry at 18.8x.
  • Analysts expect the number of shares outstanding to decline by 2.59% per year for the next 3 years.
  • To value all of this in today's terms, we will use a discount rate of 6.78%, 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?
  • While Pacira highlights strong recent performance and expanding coverage for EXPAREL, broader market adoption of its products can take 6–12 months per provider, with institutional inertia, slow formulary wins, and the need for robust commercial payer support possibly delaying or limiting the pace of revenue growth and margin expansion in the long term.
  • The company remains highly dependent on its flagship product EXPAREL, which accounts for the majority of revenues-leaving revenues, margins, and earnings vulnerable to any loss of market exclusivity, adverse regulatory rulings, patent litigation, or faster-than-expected competitive encroachment, especially as additional patent expirations approach in the 2030s-2040s.
  • Commercial success hinges on premium pricing, but the increasing use of bundled payments, payer discount negotiations, and group purchasing organizations (GPOs) may apply downward pressure on pricing and gross-to-net, while the emergence of generic/biosimilar competitors and pressure to reduce healthcare costs could erode pricing power and compress gross and operating margins over time.
  • Long-term R&D and pipeline risk remains: Pacira's significant spending on development of PCRX-201 and other pipeline assets (with R&D up notably year-over-year) could weigh on operating margins and net income if clinical trials experience delays, fail to meet endpoints, or if Phase II/III results do not translate into regulatory approval or robust market uptake.
  • There is a notable strategic emphasis on expansion through partnerships (such as the J&J MedTech collaboration on ZILRETTA and future ex-U.S. deals), but if such partnerships fail to deliver anticipated synergies or broaden market access as planned, or if international launches are delayed, long-term revenue and earnings growth could underperform management's targets and investor expectations.

Valuation

How have all the factors above been brought together to estimate a fair value?
  • The analysts have a consensus price target of $30.6 for Pacira BioSciences based on their expectations of its future earnings growth, profit margins and other risk factors. 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 $23.0.
  • In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $918.4 million, earnings will come to $112.0 million, and it would be trading on a PE ratio of 13.6x, assuming you use a discount rate of 6.8%.
  • Given the current share price of $25.04, the analyst price target of $30.6 is 18.2% 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

AnalystConsensusTarget 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 AnalystConsensusTarget 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 AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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