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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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51-0619477
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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Large accelerated filer
o
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Accelerated filer
x
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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PACIRA PHARMACEUTICALS, INC.
TABLE OF CONTENTS
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Page
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PACIRA PHARMACEUTICALS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share and per share amounts)
|
|||||||
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September 30,
2013 |
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December 31,
2012 |
||||
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(Note 2)
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||||
ASSETS
|
|
|
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Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
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$
|
3,383
|
|
|
$
|
10,126
|
|
Restricted cash
|
1,975
|
|
|
1,523
|
|
||
Short-term investments
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78,464
|
|
|
30,924
|
|
||
Accounts receivable, net
|
9,771
|
|
|
4,352
|
|
||
Inventories
|
15,606
|
|
|
12,077
|
|
||
Prepaid expenses and other current assets
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2,486
|
|
|
1,920
|
|
||
Total current assets
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111,685
|
|
|
60,922
|
|
||
Fixed assets, net
|
45,944
|
|
|
39,116
|
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Goodwill
|
9,539
|
|
|
8,297
|
|
||
Intangibles, net
|
1,670
|
|
|
3,208
|
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Other assets
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3,557
|
|
|
511
|
|
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Total assets
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$
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172,395
|
|
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$
|
112,054
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LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
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Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
1,559
|
|
|
$
|
2,569
|
|
Accrued expenses
|
15,573
|
|
|
9,792
|
|
||
Convertible senior notes
|
97,927
|
|
|
—
|
|
||
Current portion of royalty interest obligation
|
941
|
|
|
823
|
|
||
Current portion of deferred revenue
|
972
|
|
|
972
|
|
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Total current liabilities
|
116,972
|
|
|
14,156
|
|
||
Long-term debt
|
—
|
|
|
25,191
|
|
||
Royalty interest obligation
|
403
|
|
|
857
|
|
||
Deferred revenue
|
2,991
|
|
|
3,720
|
|
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Other liabilities
|
2,911
|
|
|
2,275
|
|
||
Total liabilities
|
123,277
|
|
|
46,199
|
|
||
Commitments and contingencies
|
|
|
|
|
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Stockholders’ equity:
|
|
|
|
|
|
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Preferred stock, par value $0.001; 5,000,000 shares authorized, none issued and outstanding at September 30, 2013 and December 31, 2012
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—
|
|
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—
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Common stock, par value $0.001, 250,000,000 shares authorized; 33,514,248 shares issued and 33,513,183 shares outstanding at September 30, 2013; 32,624,049 shares issued and 32,622,984 shares outstanding at December 31, 2012
|
34
|
|
|
33
|
|
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Additional paid-in capital
|
333,542
|
|
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298,317
|
|
||
Accumulated deficit
|
(284,473
|
)
|
|
(232,520
|
)
|
||
Accumulated other comprehensive income
|
17
|
|
|
27
|
|
||
Treasury stock at cost, 1,065 shares
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(2
|
)
|
|
(2
|
)
|
||
Total stockholders’ equity
|
49,118
|
|
|
65,855
|
|
||
Total liabilities and stockholders’ equity
|
$
|
172,395
|
|
|
$
|
112,054
|
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PACIRA PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except share and per share amounts)
|
|||||||||||||||
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Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
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2013
|
|
2012
|
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2013
|
|
2012
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
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Net product sales
|
$
|
22,408
|
|
|
$
|
4,550
|
|
|
$
|
49,520
|
|
|
$
|
9,978
|
|
Collaborative licensing and development revenue
|
243
|
|
|
3,484
|
|
|
729
|
|
|
16,574
|
|
||||
Royalty revenue
|
608
|
|
|
452
|
|
|
1,737
|
|
|
2,082
|
|
||||
Total revenues
|
23,259
|
|
|
8,486
|
|
|
51,986
|
|
|
28,634
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenues
|
14,791
|
|
|
9,287
|
|
|
36,396
|
|
|
22,467
|
|
||||
Research and development
|
5,962
|
|
|
3,527
|
|
|
16,724
|
|
|
6,693
|
|
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Selling, general and administrative
|
15,320
|
|
|
11,378
|
|
|
42,336
|
|
|
32,943
|
|
||||
Total operating expenses
|
36,073
|
|
|
24,192
|
|
|
95,456
|
|
|
62,103
|
|
||||
Loss from operations
|
(12,814
|
)
|
|
(15,706
|
)
|
|
(43,470
|
)
|
|
(33,469
|
)
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
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Interest income
|
62
|
|
|
87
|
|
|
207
|
|
|
218
|
|
||||
Interest expense
|
(1,892
|
)
|
|
(456
|
)
|
|
(5,325
|
)
|
|
(1,464
|
)
|
||||
Loss on early extinguishment of debt
|
—
|
|
|
—
|
|
|
(3,398
|
)
|
|
(1,062
|
)
|
||||
Royalty interest obligation
|
(132
|
)
|
|
378
|
|
|
(379
|
)
|
|
(47
|
)
|
||||
Other, net
|
(8
|
)
|
|
(48
|
)
|
|
(30
|
)
|
|
(111
|
)
|
||||
Total other expense, net
|
(1,970
|
)
|
|
(39
|
)
|
|
(8,925
|
)
|
|
(2,466
|
)
|
||||
Loss before income taxes
|
(14,784
|
)
|
|
(15,745
|
)
|
|
(52,395
|
)
|
|
(35,935
|
)
|
||||
Income tax benefit
|
—
|
|
|
—
|
|
|
442
|
|
|
—
|
|
||||
Net loss
|
$
|
(14,784
|
)
|
|
$
|
(15,745
|
)
|
|
$
|
(51,953
|
)
|
|
$
|
(35,935
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted net loss per common share
|
$
|
(0.44
|
)
|
|
$
|
(0.49
|
)
|
|
$
|
(1.57
|
)
|
|
$
|
(1.21
|
)
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted
|
33,359,576
|
|
|
32,436,207
|
|
|
33,050,721
|
|
|
29,585,716
|
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PACIRA PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited)
(In thousands)
|
|||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Net loss
|
$
|
(14,784
|
)
|
|
$
|
(15,745
|
)
|
|
$
|
(51,953
|
)
|
|
$
|
(35,935
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net unrealized gain (loss) on investments
|
3
|
|
|
(34
|
)
|
|
(10
|
)
|
|
49
|
|
||||
Total other comprehensive income (loss)
|
3
|
|
|
(34
|
)
|
|
(10
|
)
|
|
49
|
|
||||
Comprehensive loss
|
$
|
(14,781
|
)
|
|
$
|
(15,779
|
)
|
|
$
|
(51,963
|
)
|
|
$
|
(35,886
|
)
|
PACIRA PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
For the Nine Months Ended September 30, 2013
(Unaudited)
(In thousands)
|
||||||||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-In |
|
Accumulated
|
|
Treasury
|
|
Accumulated
Other Comprehensive |
|
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
Stock
|
|
Income
|
|
Total
|
|||||||||||||
Balances at December 31, 2012
|
32,623
|
|
|
$
|
33
|
|
|
$
|
298,317
|
|
|
$
|
(232,520
|
)
|
|
$
|
(2
|
)
|
|
$
|
27
|
|
|
$
|
65,855
|
|
Exercise of stock options
|
619
|
|
|
1
|
|
|
3,042
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,043
|
|
||||||
Cashless exercise of warrants
|
271
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
8,227
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,227
|
|
||||||
Unrealized loss on short-term investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
(10
|
)
|
||||||
Equity component of convertible senior notes, net of issuance costs
|
—
|
|
|
—
|
|
|
23,956
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,956
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(51,953
|
)
|
|
—
|
|
|
—
|
|
|
(51,953
|
)
|
||||||
Balances at September 30, 2013
|
33,513
|
|
|
$
|
34
|
|
|
$
|
333,542
|
|
|
$
|
(284,473
|
)
|
|
$
|
(2
|
)
|
|
$
|
17
|
|
|
$
|
49,118
|
|
PACIRA PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
|
|||||||
|
Nine Months Ended
September 30, |
||||||
|
2013
|
|
2012
|
||||
Operating activities:
|
|
|
|
|
|
||
Net loss
|
$
|
(51,953
|
)
|
|
$
|
(35,935
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
4,047
|
|
|
4,202
|
|
||
Amortization of unfavorable lease obligation and debt issuance costs
|
337
|
|
|
(178
|
)
|
||
Amortization of debt discount
|
2,924
|
|
|
571
|
|
||
Loss on early extinguishment of debt
|
3,398
|
|
|
1,062
|
|
||
Loss on disposal of fixed assets
|
31
|
|
|
—
|
|
||
Stock-based compensation
|
8,227
|
|
|
3,220
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Restricted cash
|
(452
|
)
|
|
(492
|
)
|
||
Accounts receivable, net
|
(5,419
|
)
|
|
(346
|
)
|
||
Inventories
|
(3,529
|
)
|
|
(10,661
|
)
|
||
Prepaid expenses and other assets
|
(638
|
)
|
|
(161
|
)
|
||
Accounts payable and accrued expenses
|
6,421
|
|
|
6,849
|
|
||
Royalty interest obligation
|
(336
|
)
|
|
(1,038
|
)
|
||
Other liabilities
|
735
|
|
|
(83
|
)
|
||
Deferred revenue
|
(729
|
)
|
|
(15,961
|
)
|
||
Net cash used in operating activities
|
(36,936
|
)
|
|
(48,951
|
)
|
||
Investing activities:
|
|
|
|
|
|
||
Purchases of fixed assets
|
(9,368
|
)
|
|
(13,525
|
)
|
||
Proceeds from sales of fixed assets
|
—
|
|
|
1
|
|
||
Purchases of short-term investments
|
(102,114
|
)
|
|
(54,156
|
)
|
||
Sale of short-term investments
|
54,564
|
|
|
25,950
|
|
||
Payment of contingent consideration
|
(1,241
|
)
|
|
(10,151
|
)
|
||
Net cash used in investing activities
|
(58,159
|
)
|
|
(51,881
|
)
|
||
Financing activities:
|
|
|
|
|
|
||
Proceeds from exercise of stock options and warrants
|
3,043
|
|
|
633
|
|
||
Proceeds from borrowings on long-term debt
|
—
|
|
|
27,500
|
|
||
Proceeds from offering, net
|
—
|
|
|
62,855
|
|
||
Proceeds from convertible senior notes
|
120,000
|
|
|
—
|
|
||
Repayment of debt
|
(27,500
|
)
|
|
(26,250
|
)
|
||
Payment of debt issuance and financing costs
|
(7,191
|
)
|
|
(1,365
|
)
|
||
Net cash provided by financing activities
|
88,352
|
|
|
63,373
|
|
||
Net decrease in cash and cash equivalents
|
(6,743
|
)
|
|
(37,459
|
)
|
||
Cash and cash equivalents, beginning of period
|
10,126
|
|
|
46,168
|
|
||
Cash and cash equivalents, end of period
|
$
|
3,383
|
|
|
$
|
8,709
|
|
Supplemental cash flow information
|
|
|
|
|
|
||
Cash paid for interest, including royalty interest obligation
|
$
|
3,157
|
|
|
$
|
3,290
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
||
Equity component of convertible senior notes
|
$
|
24,936
|
|
|
$
|
—
|
|
Value of warrants issued with debt
|
$
|
—
|
|
|
$
|
1,354
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
September 30,
|
|
September 30,
|
||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Largest customer
|
32%
|
|
38%
|
|
33%
|
|
41%
|
Second largest customer
|
27%
|
|
22%
|
|
27%
|
|
14%
|
Third largest customer
|
18%
|
|
14%
|
|
17%
|
|
10%
|
|
77%
|
|
74%
|
|
77%
|
|
65%
|
•
|
Level 1—Values are unadjusted quoted prices for identical assets and liabilities in active markets.
|
•
|
Level 2—Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are observable or can be corroborated by market data for the term of the instrument.
|
•
|
Level 3—Certain inputs are unobservable (supported by little or no market activity) and significant to the fair value measurement.
|
|
|
|
|
Fair Value Measurements Using
|
||||||||||||
Financial Liabilities
|
|
Carrying Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
September 30, 2013
|
|
|
|
|
|
|
|
|
||||||||
Convertible senior notes
|
|
$
|
97,927
|
|
|
$
|
—
|
|
|
$
|
246,600
|
|
|
$
|
—
|
|
|
|
|
|
Gross
|
|
Gross
|
|
|
||||||||
|
|
Amortized
|
|
Unrealized
|
|
Unrealized
|
|
Fair Value
|
||||||||
September 30, 2013
|
|
Cost
|
|
Gains
|
|
Losses
|
|
(Level 2)
|
||||||||
Debt securities:
|
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
|
$
|
33,709
|
|
|
$
|
4
|
|
|
$
|
(10
|
)
|
|
$
|
33,703
|
|
Commercial paper
|
|
36,722
|
|
|
27
|
|
|
—
|
|
|
36,749
|
|
||||
Asset-backed securities
|
|
8,016
|
|
|
—
|
|
|
(4
|
)
|
|
8,012
|
|
||||
Total
|
|
$
|
78,447
|
|
|
$
|
31
|
|
|
$
|
(14
|
)
|
|
$
|
78,464
|
|
|
|
|
|
Gross
|
|
Gross
|
|
|
||||||||
|
|
Amortized
|
|
Unrealized
|
|
Unrealized
|
|
Fair Value
|
||||||||
December 31, 2012
|
|
Cost
|
|
Gains
|
|
Losses
|
|
(Level 2)
|
||||||||
Debt securities:
|
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
|
$
|
8,874
|
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
8,874
|
|
Commercial paper
|
|
15,974
|
|
|
23
|
|
|
—
|
|
|
15,997
|
|
||||
Asset-backed securities
|
|
6,049
|
|
|
4
|
|
|
—
|
|
|
6,053
|
|
||||
Total
|
|
$
|
30,897
|
|
|
$
|
28
|
|
|
$
|
(1
|
)
|
|
$
|
30,924
|
|
|
September 30,
|
|
December 31,
|
||||
|
2013
|
|
2012
|
||||
Raw materials
|
$
|
3,859
|
|
|
$
|
4,081
|
|
Work-in-process
|
6,954
|
|
|
5,979
|
|
||
Finished goods
|
4,793
|
|
|
2,017
|
|
||
Total
|
$
|
15,606
|
|
|
$
|
12,077
|
|
|
September 30,
|
|
December 31,
|
||||
|
2013
|
|
2012
|
||||
Machinery and laboratory equipment
|
$
|
10,457
|
|
|
$
|
12,414
|
|
Computer equipment and software
|
2,243
|
|
|
1,579
|
|
||
Office furniture and equipment
|
441
|
|
|
437
|
|
||
Leasehold improvements
|
7,154
|
|
|
6,217
|
|
||
Construction in progress
|
37,038
|
|
|
30,072
|
|
||
Total
|
57,333
|
|
|
50,719
|
|
||
Less accumulated depreciation
|
(11,389
|
)
|
|
(11,603
|
)
|
||
Fixed assets, net
|
$
|
45,944
|
|
|
$
|
39,116
|
|
(i)
|
$10.0 million
upon first commercial sale in the United States;
|
(ii)
|
$4.0 million
upon first commercial sale in a major EU country (United Kingdom, France, Germany, Italy and Spain);
|
(iii)
|
$8.0 million
when annual net sales collected reach
$100.0 million
;
|
(iv)
|
$8.0 million
when annual net sales collected reach
$250.0 million
; and
|
(v)
|
$32.0 million
when annual net sales collected reach
$500.0 million
.
|
|
September 30,
2013 |
|
December 31,
2012 |
|
Estimated Useful Life
|
||||
Core Technology:
|
|
|
|
|
|
|
|
||
Gross amount
|
$
|
2,900
|
|
|
$
|
2,900
|
|
|
9 years
|
Accumulated amortization
|
(2,094
|
)
|
|
(1,853
|
)
|
|
|
||
Net
|
806
|
|
|
1,047
|
|
|
|
||
Developed Technology:
|
|
|
|
|
|
|
|
||
Gross amount
|
11,700
|
|
|
11,700
|
|
|
7 years
|
||
Accumulated amortization
|
(10,864
|
)
|
|
(9,610
|
)
|
|
|
||
Net
|
836
|
|
|
2,090
|
|
|
|
||
Trademarks and trade names:
|
|
|
|
|
|
|
|
||
Gross amount
|
400
|
|
|
400
|
|
|
7 years
|
||
Accumulated amortization
|
(372
|
)
|
|
(329
|
)
|
|
|
||
Net
|
28
|
|
|
71
|
|
|
|
||
Intangible assets, net
|
$
|
1,670
|
|
|
$
|
3,208
|
|
|
|
|
Core Technology
|
|
Developed Technology
|
|
Trademarks and Tradenames
|
|
Total
|
||||||||
2013 (remaining three months)
|
$
|
81
|
|
|
$
|
418
|
|
|
$
|
14
|
|
|
$
|
513
|
|
2014
|
322
|
|
|
418
|
|
|
14
|
|
|
754
|
|
||||
2015
|
322
|
|
|
—
|
|
|
—
|
|
|
322
|
|
||||
2016
|
81
|
|
|
—
|
|
|
—
|
|
|
81
|
|
||||
Total
|
$
|
806
|
|
|
$
|
836
|
|
|
$
|
28
|
|
|
$
|
1,670
|
|
|
September 30,
|
|
December 31,
|
||||
|
2013
|
|
2012
|
||||
Debt:
|
|
|
|
||||
Convertible senior notes
|
$
|
120,000
|
|
|
$
|
—
|
|
Long-term debt
|
—
|
|
|
27,500
|
|
||
Discount on debt
|
(22,073
|
)
|
|
(2,309
|
)
|
||
Total debt, net of debt discount
|
97,927
|
|
|
25,191
|
|
||
|
|
|
|
|
|
||
Financing obligations:
|
|
|
|
|
|
||
Current portion of royalty interest obligation
|
941
|
|
|
823
|
|
||
Long-term portion of royalty interest obligation
|
403
|
|
|
857
|
|
||
Total royalty interest obligation
|
1,344
|
|
|
1,680
|
|
||
|
|
|
|
|
|
||
Total debt and financing obligations
|
$
|
99,271
|
|
|
$
|
26,871
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Contractual interest expense
|
$
|
975
|
|
|
$
|
—
|
|
|
$
|
2,687
|
|
|
$
|
—
|
|
Amortization of debt issuance costs
|
155
|
|
|
—
|
|
|
429
|
|
|
—
|
|
||||
Amortization of debt discount
|
1,035
|
|
|
—
|
|
|
2,863
|
|
|
—
|
|
||||
|
$
|
2,165
|
|
|
$
|
—
|
|
|
$
|
5,979
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Effective interest rate
|
7.22
|
%
|
|
—
|
|
|
7.22
|
%
|
|
—
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Cost of revenues
|
$
|
414
|
|
|
$
|
200
|
|
|
$
|
1,041
|
|
|
$
|
400
|
|
Research and development
|
1,660
|
|
|
281
|
|
|
3,124
|
|
|
745
|
|
||||
Selling, general and administrative
|
1,703
|
|
|
988
|
|
|
4,062
|
|
|
2,075
|
|
||||
Total
|
$
|
3,777
|
|
|
$
|
1,469
|
|
|
$
|
8,227
|
|
|
$
|
3,220
|
|
Plan
|
|
Awards Reserved for Issuance
|
|
Awards Issued
|
|
Awards Available for Grant
|
|||
2011 Stock Incentive Plan
|
|
3,180,655
|
|
|
2,923,003
|
|
|
257,652
|
|
2007 Stock Incentive Plan
|
|
2,023,882
|
|
|
2,023,882
|
|
|
—
|
|
|
|
5,204,537
|
|
|
4,946,885
|
|
|
257,652
|
|
|
Number of Shares
|
|
Weighted Average Exercise Price
|
|||
Outstanding at December 31, 2012
|
4,003,166
|
|
|
$
|
7.86
|
|
Granted
|
808,815
|
|
|
27.29
|
|
|
Exercised
|
(618,952
|
)
|
|
4.92
|
|
|
Forfeited
|
(319,475
|
)
|
|
10.62
|
|
|
Expired
|
(1,687
|
)
|
|
7.24
|
|
|
Outstanding at September 30, 2013
|
3,871,867
|
|
|
$
|
12.16
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
September 30,
|
|
September 30,
|
|||||||||||||
2013
|
|
2012
|
|
2013
|
|
2012
|
|||||||||
Numerator for basic and diluted loss per share
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(14,784
|
)
|
|
$
|
(15,745
|
)
|
|
$
|
(51,953
|
)
|
|
$
|
(35,935
|
)
|
Denominator
|
|
|
|
|
|
|
|
||||||||
Weighted average shares of common stock outstanding
|
33,360
|
|
|
32,436
|
|
|
33,051
|
|
|
29,586
|
|
||||
Effect of dilutive securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Weighted average shares of common stock -diluted
|
33,360
|
|
|
32,436
|
|
|
33,051
|
|
|
29,586
|
|
||||
Net loss per share
|
|
|
|
|
|
|
|
||||||||
Basic net loss per share of common stock
|
$
|
(0.44
|
)
|
|
$
|
(0.49
|
)
|
|
$
|
(1.57
|
)
|
|
$
|
(1.21
|
)
|
Diluted net loss per share of common stock
|
$
|
(0.44
|
)
|
|
$
|
(0.49
|
)
|
|
$
|
(1.57
|
)
|
|
$
|
(1.21
|
)
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
September 30,
|
|
September 30,
|
|||||||||
2013
|
|
2012
|
|
2013
|
|
2012
|
|||||
Stock options
|
2,104
|
|
|
1,374
|
|
|
1,991
|
|
|
1,247
|
|
Warrants
|
40
|
|
|
227
|
|
|
91
|
|
|
158
|
|
Conversion premium on the Notes
|
1,535
|
|
|
—
|
|
|
741
|
|
|
—
|
|
Total
|
3,679
|
|
|
1,601
|
|
|
2,823
|
|
|
1,405
|
|
Year
|
|
||
2013 (remaining three months)
|
$
|
1,095
|
|
2014
|
4,765
|
|
|
2015
|
4,978
|
|
|
2016
|
5,130
|
|
|
2017
|
5,072
|
|
|
2018 through 2020
|
13,734
|
|
|
Total
|
$
|
34,774
|
|
|
Three Months Ended
|
|
% Increase / (Decrease)
|
|
Nine Months Ended
|
|
% Increase / (Decrease)
|
||||||||||||
|
September 30,
|
|
|
September 30,
|
|
||||||||||||||
|
2013
|
|
2012
|
|
|
2013
|
|
2012
|
|
||||||||||
Net product sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
EXPAREL
|
$
|
20,018
|
|
|
$
|
4,550
|
|
|
340%
|
|
$
|
45,683
|
|
|
$
|
6,835
|
|
|
568%
|
DepoCyt(e)
|
2,390
|
|
|
—
|
|
|
N/A
|
|
3,837
|
|
|
3,080
|
|
|
25%
|
||||
DepoDur
|
—
|
|
|
—
|
|
|
N/A
|
|
—
|
|
|
63
|
|
|
(100)%
|
||||
Total net product sales
|
22,408
|
|
|
4,550
|
|
|
392%
|
|
49,520
|
|
|
9,978
|
|
|
396%
|
||||
Collaborative licensing and development
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
revenue
|
243
|
|
|
3,484
|
|
|
(93)%
|
|
729
|
|
|
16,574
|
|
|
(96)%
|
||||
Royalty revenue
|
608
|
|
|
452
|
|
|
35%
|
|
1,737
|
|
|
2,082
|
|
|
(17)%
|
||||
Total revenues
|
$
|
23,259
|
|
|
$
|
8,486
|
|
|
174%
|
|
$
|
51,986
|
|
|
$
|
28,634
|
|
|
82%
|
|
Three Months Ended
|
|
% Increase / (Decrease)
|
|
Nine Months Ended
|
|
% Increase / (Decrease)
|
||||||||||||
|
September 30,
|
|
|
September 30,
|
|
||||||||||||||
|
2013
|
|
2012
|
|
|
2013
|
|
2012
|
|
||||||||||
Cost of goods sold
|
$
|
14,791
|
|
|
$
|
9,287
|
|
|
59%
|
|
$
|
36,396
|
|
|
$
|
22,072
|
|
|
65%
|
Cost of collaborative licensing and
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
development
|
—
|
|
|
—
|
|
|
N/A
|
|
—
|
|
|
395
|
|
|
(100)%
|
||||
Total cost of revenues
|
$
|
14,791
|
|
|
$
|
9,287
|
|
|
59%
|
|
$
|
36,396
|
|
|
$
|
22,467
|
|
|
62%
|
|
Three Months Ended
|
|
% Increase / (Decrease)
|
|
Nine Months Ended
|
|
% Increase / (Decrease)
|
||||||||||||
|
September 30,
|
|
|
September 30,
|
|
||||||||||||||
|
2013
|
|
2012
|
|
|
2013
|
|
2012
|
|
||||||||||
Research and development expense
|
$
|
5,962
|
|
|
$
|
3,527
|
|
|
69%
|
|
$
|
16,724
|
|
|
$
|
6,693
|
|
|
150%
|
•
|
Salaries and benefits increased by $1.6 million primarily driven by a $1.4 million increase in stock-based
compensation expense;
|
•
|
Clinical development expenses increased by $0.4 relating to our Phase 2/3 pivotal trial of EXPAREL administered as a femoral nerve block for total knee arthroplasty and our Phase 3 pivotal trial of EXPAREL as an intercostal nerve block for thoracotomy; and
|
•
|
Product development expenses increased by $0.5 million related to a potential new manufacturing process for
EXPAREL.
|
•
|
Salaries and benefits increased by $2.9 million primarily driven by a $2.4 million increase in stock-based
compensation expense;
|
•
|
Clinical development expenses increased by $5.8 million mainly for the two nerve block trials;
|
•
|
Product development expenses increased by $0.6 million related to a potential new manufacturing process for EXPAREL; and
|
•
|
Pre-clinical expenses increased by $0.7 million for a toxicity study in animals.
|
|
Three Months Ended
|
|
% Increase / (Decrease)
|
|
Nine Months Ended
|
|
% Increase / (Decrease)
|
||||||||||||
|
September 30,
|
|
|
September 30,
|
|
||||||||||||||
|
2013
|
|
2012
|
|
|
2013
|
|
2012
|
|
||||||||||
General and administrative
|
$
|
5,305
|
|
|
$
|
4,682
|
|
|
13%
|
|
$
|
14,636
|
|
|
$
|
11,542
|
|
|
27%
|
Sales and marketing
|
10,015
|
|
|
6,696
|
|
|
50%
|
|
27,700
|
|
|
21,401
|
|
|
29%
|
||||
Total selling, general, and administrative
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
expenses
|
$
|
15,320
|
|
|
$
|
11,378
|
|
|
35%
|
|
$
|
42,336
|
|
|
$
|
32,943
|
|
|
29%
|
•
|
General and administrative expenses increased by
$0.6
million primarily due to increases in salaries and benefits, including
$0.5
million in stock-based compensation expense, associated with our increased headcount to support the commercial and manufacturing growth of EXPAREL; and
|
•
|
Sales and marketing expenses increased by
$3.3
million primarily due to a
$2.7 million
increase in project-related spend for EXPAREL, which included educational initiatives and programs to create product awareness in the orthopedic market, along with other selling initiatives and promotional activities, and a
$0.6 million
increase in salaries and benefits driven by an increase in the number of our field-based medical health science personnel.
|
•
|
General and administrative expenses increased by
$3.1
million primarily due to increases in salaries and benefits, including $1.2 million in stock-based compensation expense, associated with our increased headcount to support the commercial and manufacturing growth of EXPAREL; and
|
•
|
Sales and marketing expenses increased by
$6.3
million primarily due to a
$5.0 million
increase in project-related spend for EXPAREL, which included educational initiatives and programs to create product awareness in the orthopedic market, along with other selling initiatives and promotional activities, and a
$1.3 million
increase in salaries and benefits driven by an increase in the number of our field-based medical health science personnel.
|
|
Three Months Ended
|
|
% Increase / (Decrease)
|
|
Nine Months Ended
|
|
% Increase / (Decrease)
|
||||||||||||
|
September 30,
|
|
|
September 30,
|
|
||||||||||||||
|
2013
|
|
2012
|
|
|
2013
|
|
2012
|
|
||||||||||
Interest income
|
$
|
62
|
|
|
$
|
87
|
|
|
(29)%
|
|
$
|
207
|
|
|
$
|
218
|
|
|
(5)%
|
Interest expense
|
(1,892
|
)
|
|
(456
|
)
|
|
315%
|
|
(5,325
|
)
|
|
(1,464
|
)
|
|
264%
|
||||
Loss on early extinguishment of debt
|
—
|
|
|
—
|
|
|
N/A
|
|
(3,398
|
)
|
|
(1,062
|
)
|
|
220%
|
||||
Royalty interest obligation
|
(132
|
)
|
|
378
|
|
|
(135)%
|
|
(379
|
)
|
|
(47
|
)
|
|
706%
|
||||
Other, net
|
(8
|
)
|
|
(48
|
)
|
|
(83)%
|
|
(30
|
)
|
|
(111
|
)
|
|
(73)%
|
||||
Total other expense, net
|
$
|
(1,970
|
)
|
|
$
|
(39
|
)
|
|
4,951%
|
|
$
|
(8,925
|
)
|
|
$
|
(2,466
|
)
|
|
262%
|
|
Three Months Ended
|
|
% Increase / (Decrease)
|
|
Nine Months Ended
|
|
% Increase / (Decrease)
|
||||||||||||
|
September 30,
|
|
|
September 30,
|
|
||||||||||||||
|
2013
|
|
2012
|
|
|
2013
|
|
2012
|
|
||||||||||
Income tax benefit
|
$
|
—
|
|
|
$
|
—
|
|
|
N/A
|
|
$
|
442
|
|
|
$
|
—
|
|
|
N/A
|
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
|
2013
|
|
2012
|
||||
Net cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
(36,936
|
)
|
|
$
|
(48,951
|
)
|
Investing activities
|
(58,159
|
)
|
|
(51,881
|
)
|
||
Financing activities
|
88,352
|
|
|
63,373
|
|
||
Net decrease in cash and cash equivalents
|
$
|
(6,743
|
)
|
|
$
|
(37,459
|
)
|
•
|
our ability to successfully continue our commercialization of EXPAREL;
|
•
|
the costs of our commercialization activities for EXPAREL;
|
•
|
the cost and timing of expanding our manufacturing facilities and purchasing manufacturing and other capital equipment for EXPAREL and our other product candidates;
|
•
|
the costs of performing additional clinical trials for EXPAREL, including the pediatric trials required by the FDA as a condition of approval and the pivotal nerve block trials;
|
•
|
the scope, progress, results, and costs of development for additional indications for EXPAREL and for our other product candidates;
|
•
|
the cost, timing, and outcome of regulatory review of our other product candidates;
|
•
|
the extent to which we acquire or invest in products, businesses, and technologies;
|
•
|
the extent to which we choose to establish collaboration, co-promotion, distribution, or other similar agreements for our product candidates; and
|
•
|
the costs of preparing, submitting, and prosecuting patent applications and maintaining, enforcing, and defending intellectual property claims.
|
10.1
|
|
First Amendment to Commercial Outsourcing Services Agreement, by and between the Company and Integrated Commercialization Services, Inc., dated August 1, 2013.* †
|
|
|
|
10.2
|
|
Amendment #3 to Services Agreement, by and among, the Company, MPM, and Dr. Gary Patou, dated September 11, 2013.*
|
|
|
|
10.3
|
|
Third Amendment to Consulting Agreement, by and between the Company and Gary Pace, dated September 11, 2013.*
|
|
|
|
31.1
|
|
Certification of President, Chief Executive Officer, and Chairman pursuant to Rule 13a-14(a) and 15d-14(a), as amended.*
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a), as amended.*
|
|
|
|
32.1
|
|
Certification of President, Chief Executive Officer, and Chairman pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
|
|
|
|
101
|
|
The following materials from the Quarterly Report on Form 10-Q of Pacira Pharmaceuticals, Inc. for the quarter ended September 30, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Loss, (iv) the Consolidated Statement of Stockholders’ Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Condensed Notes to Consolidated Financial Statements, tagged as blocks of text.
|
|
|
PACIRA PHARMACEUTICALS, INC.
(REGISTRANT)
|
|
|
|
|
|
|
Dated:
|
October 31, 2013
|
/s/ DAVID STACK
|
|
|
David Stack
|
|
|
President, Chief Executive Officer, and Chairman
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
Dated:
|
October 31, 2013
|
/s/ JAMES SCIBETTA
|
|
|
James Scibetta
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
A.
|
ICS and the Company are parties to a Commercial Outsourcing Services Agreement dated August 25, 2011 (the “Agreement”);
|
B.
|
Pursuant to the Agreement, among other things, the Company engaged ICS to perform commercialization services for certain pharmaceutical products; and
|
C.
|
The parties now wish to amend the Agreement in certain respects.
|
1.
|
Defined Terms
. Capitalized terms in this Amendment that are not defined in this Amendment have the meanings given to them in the Agreement. If there is any conflict between the Agreement and any provision of this Amendment, this Amendment will control.
|
2.
|
Schedule B
. The parties agree that Schedule B to the Agreement is hereby deleted in its entirety and replaced with the attached Revised Schedule B.
|
3.
|
No Other Changes
. Except as otherwise provided in this Amendment, the terms and conditions of the Agreement will continue in full force.
|
Customer Setup Fee
|
$[**]
|
[**]
|
Account Maintenance/ License Updates
|
$[**]
|
[**]
|
Allocation Fee
|
$[**]
|
[**]
|
Rush Order
|
$[**]
|
[**]
|
Emergency Order
|
$[**]
|
[**]
|
International Order
|
$[**]
|
[**]
|
Warehouse & Distribution Fees
|
||
Product Storage
|
$[**]
|
[**]
|
Trade Order Processing Fees
|
$[**]
$[**]
$[**]
$[**]
+
$[**]
$[**]
$[**]
|
[**]
[**]
[**]
|
Receiving Fee
|
$[**]
|
[**]
|
Shipping Fee
|
$[**]
|
[**]
|
Bulk Shipments
|
$[**]
|
[**]
|
Packing Supplies
|
[**]
|
[**]
|
Freight
|
[**]
|
[**]
|
Finance
|
||
Invoice Processing
|
$[**]
|
[**]
|
Credit Verification Reports
- Dun & Bradstreet
|
$[**]
|
[**]
|
Credit Verifications Reports
- Experian
|
$[**]
|
[**]
|
Returns Management
|
||
RGA Initiation
|
$[**]
+
$[**]
|
[**]
[**]
|
Return Processing
|
$[**]
|
[**]
|
Partial Returns Processing
|
$[**]
|
[**]
|
Returns Storage
|
$[**]
|
[**]
|
Contract and Chargeback Management
|
||
Chargeback Processing-
Manual
|
$[**]
|
[**]
|
Chargeback Processing-Electronic
|
$[**]
|
[**]
|
Membership Additions
|
$[**]
|
[**]
|
Contract Setup
|
$[**]
|
[**]
|
Contract Updates
|
$[**]
|
[**]
|
Information Technology and Reporting
|
||
852/867: ABC,CAH, MCK
|
$[**]
|
[**]
|
Custom Reports
|
$[**]
|
[**]
|
Custom Development Services
|
$[**]
|
[**]
|
Additional Fees
|
||
Product Destruction
|
[**]
|
[**]
|
Telecom
|
[**]
|
[**]
|
FedEx/UPS/Postage Expenses
|
[**]
|
[**]
|
Pre-Approved Assessorial Labor Charge-Warehouse
|
$[**]
|
[**]
|
Pre-Approved Assessorial Labor Charge-Office Staff
|
$[**]
|
[**]
|
Pre-Approved Assessorial Labor Charge-QC, Management
|
$[**]
|
[**]
|
ICS Travel
|
[**]
|
[**]
|
Consulting Fees
:
Consultant shall be compensated at the rate of $5,000 per month, to be billed monthly via invoice.
Invoices shall be paid within thirty (30) days of receipt at Pacira. Total charges of annual billing not to exceed $60,000. Invoices must be sent electronically to
Accountspayable@pacira.com
.
Payment info on file if no changes.
Exhibit B
:
Form W-9 -
Request for Taxpayer Identification Number and Certification along with the Consulting Agreement on file if no changes.
Reimbursement of Expenses:
Pacira Pharmaceuticals will reimburse consultant for all pre-approved travel and related expenses.
The consultant is responsible for making all travel arrangements through his/her travel agent or Pacira’s travel agency, unless otherwise instructed.
Expense reports should be submitted to Pacira with corresponding receipts within five (5) days of the completed travel.
Pacira Pharmaceuticals Contact:
Name James Scibetta
Title CFO
Pacira Pharmaceuticals, Inc.
5 Sylvan Way
Parsippany, NJ 07054
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Pacira Pharmaceuticals, Inc. (the “Registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
Date:
|
October 31, 2013
|
/s/ David Stack
|
|
|
David Stack
|
|
|
President, Chief Executive Officer, and Chairman
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Pacira Pharmaceuticals, Inc. (the “Registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
Date:
|
October 31, 2013
|
/s/ James Scibetta
|
|
|
James Scibetta
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
Date:
|
October 31, 2013
|
/s/ David Stack
|
|
|
David Stack
|
|
|
President, Chief Executive Officer, and Chairman
|
|
|
(Principal Executive Officer)
|
Date:
|
October 31, 2013
|
/s/ James Scibetta
|
|
|
James Scibetta
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|