Pacira BioSciences Shares Tumble as FDA Approves Exparel Generic
By Colin Kellaher
Shares of Pacira BioSciences tumbled more than 25% and hit a new 52-week low Tuesday after the Food and Drug Administration approved a generic version of the pain-management company's biggest selling drug, but at least one Wall Street firm says the selloff is overdone.
Shares of the Tampa, Fla., company were recently changing hands at $21.15, down 26%, after touching a 52-week low of $20.52 earlier in the session.
In a posting on its website, the FDA said it has approved Jiangsu Hengrui Pharma's application for bupivacaine liposome, a generic equivalent of Pacira's non-opioid pain drug Exparel.
Hengrui is the parent company of eVenus Pharmaceutical Laboratories, which has been involved in patent litigation with Pacira over plans to sell a generic version of Exparel.
Sales of Exparel accounted for $132.4 million of Pacira's first-quarter revenue of $167.1 million.
Information on the status of the patent litigation wasn't immediately available. During Pacira's first-quarter earnings, executives said they were expecting a court ruling by the end of June.
Analysts at Truist said they believe the drop in Pacira's stock price is a knee-jerk reaction, and that eVenus won't be able to commercially launch its generic version of Exparel until the late 2030s at minimum.
In a research note, Truist said that even if the initial court ruling is partially in favor of eVenus, an appeal by Pacira would trigger a 30-month stay. The analysts also note that Pacira has additional patents filed that will need to be litigated by eVenus "with little success, in our view."
Truist, with a buy rating and $5 price target on Pacira shares, said it advises investors to "weather the storm."
Write to Colin Kellaher at colin.kellaher@wsj.com
(END) Dow Jones Newswires
July 02, 2024 12:22 ET (16:22 GMT)
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