Pacira BioSciences Surges on Lawsuit to Defend Key Pain Drug
Legal action triggers a 30-month stay on FDA approval for a generic version of its non-opioid pain medication, EXPAREL, shielding a key revenue stream.
Shares of Pacira BioSciences, Inc. (NASDAQ: PCRX) climbed more than 2.7% in Tuesday trading after the company launched a legal defense to protect its flagship non-opioid pain medication, EXPAREL. The biopharmaceutical firm announced it has filed patent infringement lawsuits that automatically delay potential generic competition for a significant period.
Pacira’s stock price rose to $23.81, pushing its market capitalization over $1 billion, after it disclosed lawsuits against The WhiteOak Group and Qilu Pharmaceutical. The legal action, filed in the U.S. District Court for the District of Delaware, alleges that the companies' proposed generic products would infringe on Pacira's intellectual property. EXPAREL is protected by 21 patents listed in the FDA's Orange Book, with key patents not expiring until 2041 and 2044.
The filing is a critical strategic move for Pacira, as it triggers an automatic 30-month stay on final FDA approval for the generic drug applications under the Hatch-Waxman Act. This provision is designed to give courts time to resolve patent disputes before a generic competitor can enter the market, according to legal experts at Axinn. For Pacira, this provides at least two and a half years of additional revenue protection from its most important commercial product.
EXPAREL is a long-acting local anesthetic administered during surgery to control pain and reduce the need for opioids. It has become a cornerstone of Pacira's business, and fending off generic competition is paramount to the company's financial outlook. In its official announcement, the company expressed confidence in its intellectual property, stating it "will continue to vigorously defend its EXPAREL patent portfolio."
The market's positive reaction reflects the value of this extended exclusivity. The 30-month shield provides Pacira with significant revenue visibility and more time to transition its portfolio as it develops other products. Investors are betting that the secured cash flow from EXPAREL will fund future growth and strengthen the company's financial position.
Despite the stock's single-day jump, it remains below its 52-week high of $27.64. However, the move narrows the gap to the consensus analyst price target of $30.17, suggesting Wall Street sees further upside potential. The legal development provides a clear catalyst that could help the stock regain momentum.
The road ahead involves a potentially lengthy and expensive legal battle. To launch their products, The WhiteOak Group and Qilu Pharmaceutical must successfully argue that their generic versions do not infringe on Pacira's patents or that the patents themselves are invalid. Should the litigation extend beyond the 30-month stay, the FDA could approve the generics, but the manufacturers would launch "at-risk," exposing them to significant financial damages if the court ultimately sides with Pacira.
For now, the decisive legal action provides Pacira with a crucial defensive moat, reassuring investors that its primary revenue generator will remain protected from generic erosion well into the future.