Pacira BioSciences, Inc.
For the period ended Sep 30, 2026. Filed Nov 5, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 5, 2026
PCRX$36.43+0.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-04.
0001628280-26-052635
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0001628280-26-071136
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 172 previous paragraphs and 188 current paragraphs.
93 unchanged; 59 reworded; 35 added; 19 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 11 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (35)
Current report
On October 8, 2026, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Viatris Inc., a Delaware corporation (“Viatris”), and Peach Purchaser Sub Inc., a Delaware corporation and wholly owned subsidiary of Viatris (“Purchaser”). Pursuant to the Merger Agreement, on October 30, 2026, Purchaser commenced a tender offer (the “Offer”) to purchase each issued and outstanding share of our common stock (the “Shares”) at an offer price of $36.50 per Share in cash, net of applicable withholding taxes and without interest.
Current report
As soon as practicable following the completion of the Offer, upon the terms and subject to the conditions of the Merger Agreement, Purchaser will merge with and into Pacira (the “Merger”), with Pacira continuing as the surviving corporation and as a wholly owned subsidiary of Viatris. The Merger Agreement contemplates that the Merger will be effected pursuant to Section 251(h) of the Delaware General Corporation Law, which permits completion of the Merger without a vote of the holders of our common stock upon the acquisition by Purchaser of a majority of the aggregate voting power of our common stock. As a result of the Merger, we will cease to be a publicly traded company.
Current report
The Merger Agreement contains customary representations and warranties. The Merger is expected to close before the end of the calendar year 2026, subject to the satisfaction or waiver of customary conditions, including, among others, that the number of Shares tendered in the Offer, together with Shares then owned by Purchaser and its affiliates, represents at least one Share more than 50% of the then-issued and outstanding Shares at the time of the expiration of the Offer. The Merger Agreement provides Viatris and Pacira with certain termination rights and, under certain circumstances, may require us to pay Viatris a termination fee of $62.0 million.
Current report
For additional information related to the Merger Agreement, refer to the Solicitation/Recommendation Statement on Schedule 14D-9 filed by us with the SEC on October 30, 2026, together with the exhibits and annexes thereto and as amended or supplemented from time to time. Please also see “Item 1A. Risk Factors—Risks Related to Our Pending Acquisition by Viatris Inc.” contained herein.
Current report
•In September 2026, the U.S. Patent and Trademark Office issued Patent Nos. 12,728,094 and 12,728,095 related to EXPAREL. These two patents claim chemical composition of the EXPAREL product, each have an expiration date of July 2, 2044 and are both listed in the FDA Approved Drug Products with Therapeutic Equivalence Evaluations (the ‘Orange Book’). With these two new patents, there are currently 23 EXPAREL patents listed in the Orange Book, all with an expiration date between January 2041 and July 2044.
Current report
•In October 2026, we announced a strategic partnership with Molteni Farmaceutici, or Molteni, to expand access to opioid-sparing postsurgical pain management across European markets. Through this partnership, Molteni will receive exclusive rights to distribute and commercialize EXPAREL in certain licensed territories. We received an upfront payment, a supply price and royalties on future commercial sales by Molteni in the licensed territories. Molteni will lead regulatory, market access and commercialization activities across the licensed territories, leveraging its established leadership and proven track record in pain management. Molteni plans to launch EXPAREL sequentially, beginning with Italy, Germany, Austria and Poland, and pursue approval in Switzerland. The first commercial sale is currently expected to occur in 2027.
Current report
•In October 2026, PCRX-1001 qualified for the FDA’s Veterinary Innovation Program (VIP). The structure and benefits of this regulatory program are highly similar to the human RMAT (Regenerative Medicine Advanced Therapy) program.
Current report
ZILRETTA Clinical Benefits in OA Knee Pain
Current report
We are preparing to initiate a Phase 2 clinical program of PCRX-2002 in bunionectomy later this year in Canada. PCRX-2002 is our novel hydrogel formulation of ropivacaine designed to provide both rapid onset and long-acting analgesia through a single instillation into the surgical field. While the study’s primary objective is safety, it is also designed to evaluate key efficacy measures, including postsurgical pain control and opioid utilization, which will help inform future development plans. If successful, we believe PCRX-2002 would complement EXPAREL and further strengthen our leadership position in postsurgical pain management.
Current report
Earlier-Stage HCAd-Based Product Candidates
Current report
In October 2026, we entered into an agreement with Molteni to expand access to EXPAREL across select European markets. Under the terms of the agreement, Molteni has the exclusive rights to distribute and commercialize EXPAREL in the E.U. and the U.K. We received an upfront payment that we will recognize over the license term upon commercialization and will receive a contractually stated price and royalties on future commercial sales by Molteni in its licensed territories. We will manufacture EXPAREL and Molteni will lead regulatory, market access and commercialization activities in the licensed territories. Molteni plans to launch EXPAREL sequentially, beginning with Italy, Germany, Austria and Poland, and to pursue approval in Switzerland. We currently expect the first commercial sale under this agreement to occur in 2027.
Current report
For the three months ended September 30, 2026 versus 2025, ZILRETTA revenue increased 3% versus 2025, driven by a 3% increase in net selling price. For the nine months ended September 30, 2026 versus 2025, ZILRETTA revenue increased 7%, driven by a 4% increase in kit volume and a 3% increase in net selling price. Net selling price increases primarily reflected price increases, partially offset by higher customer discounting.
Current report
On July 31, 2026, the iovera° Divestiture was completed, after which we no longer recognize revenue associated with iovera° product sales. For more information, see Note 3, iovera° Divestiture, to our condensed consolidated financial statements included herein.
Current report
In July 2026, we entered into a development and commercialization agreement with Zimmer, pursuant to which both parties intend to continue the label expansion of iovera° in the field of spasticity through FDA approval and completion of the remaining iovera° Investigator-Initiated Trial, or IIT, contracts that we had entered into prior to the Divestiture. As a result, we began recognizing service revenue related to this agreement during the three months ended September 30, 2026.
Current report
Cost of Sales
Current report
In July 2026, we entered into a development and commercialization agreement with Zimmer, pursuant to which both parties intend to continue the label expansion of iovera° in the field of spasticity through FDA approval and completion of the remaining iovera° IIT contracts that we entered into prior to the Divestiture. As a result, we began incurring cost of service related to this agreement during the three months ended September 30, 2026.
Current report
During the third quarter of 2026, the results of stability testing triggered a decision to make a change in our expiration dating of EXPAREL. Starting in the fourth quarter of 2026, we expect to prospectively label EXPAREL with an expiration date of 18 months. We have filed this change in expiration dating to the regulatory agencies, with implementation expected in November 2026. Inventory on hand as of September 30, 2026 will retain its original label with an expiration date of 24 months. We do not expect a material impact to EXPAREL returns as a result of this change in our expiration dating.
Current report
Regulatory and other expense decreased 5% in the three months ended September 30, 2026 versus 2025 due to reduced headcount and increased 16% in the nine months ended September 30, 2026 versus 2025 primarily due to increased third-party PCRX-2002 regulatory support.
Current report
Sales and marketing expense decreased 16% and 3% in the three and nine months ended September 30, 2026 versus 2025, respectively, driven by lower third-party marketing services and a reduction in expenses resulting from the iovera° Divestiture.
Current report
Other Operating (Gains) Expenses, Net
Current report
Total other operating gains, net were $5.7 million and $0.4 million during the three and nine months ended September 30, 2026. Total other operating expenses, net were $6.8 million and $13.3 million during the three and nine months ended September 30, 2025.
Current report
During the three and nine months ended September 30, 2026, we recorded costs associated with the proposed Merger with Viatris of approximately $7.4 million primarily for associated outside legal and external financial advisory fees. Additional Merger-related costs are expected to be incurred through the closing of the Merger. For more information, see Note 1, Description of Business, to our condensed consolidated financial statements included herein.
Current report
During both the three and nine months ended September 30, 2026, we recognized separation costs of $0.6 million primarily related to redundant third-party services and certain assets that have no future economic benefit after the July 2026 iovera° Divestiture.
Current report
In July 2025, we instituted a reduction in force at our Science Center Campus in San Diego, California. As a result, during both the three and nine months ended September 30, 2025, we recognized $3.7 million of employee termination benefit charges which consisted of garden leave under California employment law, severance, healthcare benefits, and, to a lesser extent, other one-time termination benefits.
Current report
During the three and nine months ended September 30, 2025, we recognized $23.1 million in other income upon receipt of a cash payment associated with the U.S. District Court for the District of Nevada issuing judgment declaring that the Research Development Foundation, or RDF, was required to repay us the royalties on EXPAREL sales that we previously paid under protest.
Current report
During both the three and nine months ended September 30, 2025, we recorded a $25.9 million IPR&D impairment associated with our ZILRETTA shoulder asset due to revised completion timelines for clinical trials and commercial availability which directly impacted revenue forecasts, among other factors.
Current report
Other Income (Loss), Net
Current report
In both the three and nine months ended September 30, 2026, we recognized a $6.6 million gain on the Divestiture, resulting from the cash received in July 2026 from Zimmer in consideration for divesting the net assets of iovera° less our carrying value of the transferred assets.
Current report
In both the three and nine months ended September 30, 2025, we recognized a $1.0 million loss on early extinguishment of debt in conjunction with the repayment of the term loan (the “TLA Term Loan”) issued under the credit agreement (as amended and/or restated to date, the “TLA Credit Agreement”) by and between us and JPMorgan Chase Bank, N.A., as administrative agent, and certain lenders, dated March 31, 2023.
Current report
Income Tax Expense
Current report
The effective tax rate of 1% for the three months ended September 30, 2026 was primarily impacted by a $5.2 million discrete tax benefit associated with the utilization of U.S. capital loss carryforwards to offset the capital gain recognized in connection with the divestiture of the iovera° business during the third quarter of 2026. In connection with the closing of the Divestiture on July 31, 2026, the parties agreed to treat the transaction as a deemed asset sale for U.S. federal income tax purposes through an election under Section 338(h)(10) of the Internal Revenue Code. For more information on the Divestiture, see Note 3, iovera° Divestiture.
Current report
We are subject to a variety of specified liquidity and capitalization restrictions under the Merger Agreement. Unless we obtain Viatris’ prior written consent (which consent may not be unreasonably withheld, conditioned or delayed) and except (i) as expressly required by the Merger Agreement; (ii) as required by applicable law; or (iii) as set forth in the confidential disclosure schedule we delivered to Viatris, we may not, among other things and subject to certain exceptions and aggregate limitations, incur additional indebtedness, issue additional shares of our common stock (other than shares issued upon the exercise of stock options or the vesting of equity awards outstanding as of the date of the Merger Agreement or purchased under our current ESPP offering period), repurchase our stock, pay dividends or make other distributions, acquire assets, securities or property, dispose of material assets, enter into, amend or terminate material contracts outside the ordinary course of business or make certain additional capital expenditures.
Current report
In October 2026, we entered into the Merger Agreement with Viatris. Additional Merger-related costs are expected to be incurred through the closing of the Merger, which may exceed $40.0 million contingent on the Merger closing. The Merger Agreement provides Viatris and Pacira with certain termination rights and, under certain circumstances, may require us to pay Viatris a termination fee of $62.0 million if the Merger does not close.
Current report
Consummation of the Offer and the Merger may each constitute a “Fundamental Change” or a “Make-Whole Fundamental Change” (each as defined in the indenture governing the 2029 Notes or the 2029 Indenture) under the 2029 Indenture, which may give noteholders the right to require the us to repurchase such 2029 Notes for cash at a price equal to 100% of the principal amount thereof plus any accrued and unpaid interest, or the right to convert such 2029 Notes at an increased conversion rate, in each case, in accordance with the terms of the 2029 Indenture.
Current report
In addition, we have agreed to use reasonable best efforts to cooperate with Viatris in seeking to enter into arrangements with the counterparties to the privately negotiated capped call transaction with respect to the 2029 Notes, or the Capped Call Transactions, to cause the Capped Call Transactions to be exercised, settled, canceled or otherwise terminated as of when the Merger becomes effective. We have also agreed not to amend, modify or otherwise change the terms of the documentation governing the Capped Call Transactions, or exercise any right or enter into any agreement to terminate or trigger an early settlement of any of the Capped Call Transactions, in each case without Viatris’ prior written consent.
Removed paragraphs (19)
Previous report
•In June 2026, we entered into a Stock and Asset Purchase Agreement with Zimmer to divest iovera° for up to $140.0 million, including an upfront payment of $70.0 million and potential contingent consideration of up to an additional $70.0 million in the aggregate, payable upon the achievement of revenue-based milestones up to and through the period ending December 31, 2031 (the “Transaction”). The Transaction closed on July 31, 2026, in which we received cash of $73.6 million, after customary purchase price adjustments. Going forward, we will collaborate with Zimmer on advancing the iovera° spasticity program with an opportunity for us to receive incremental compensation assuming successful completion of a registrational study and subsequent regulatory approval. We also entered into a customary transition services agreement with Zimmer in connection with the closing.
Previous report
We believe this transaction advances our transition into an innovative biopharmaceutical company and aligns with our 5x30 strategy and that Zimmer’s global scale, established expertise commercializing medical devices and commitment to significantly expanding access can unlock the full potential of iovera° to benefit more patients and providers globally.
Previous report
For more information, see Note 3, Assets and Liabilities Held for Sale, to our condensed consolidated financial statements included herein.
Previous report
•In June 2026, Thomas Wiggans was elected by stockholders to our board of directors. Mr. Wiggans brings with him more than 40 years of leadership experience across commercial operations, corporate strategy and executive management within the global life sciences industry, as well as significant experience leading biopharmaceutical companies through successful acquisitions. Mr. Wiggans has served as chief executive officer of four biopharmaceutical companies with successful exits through acquisition or strategic transactions, and most notably co-founded Dermira, Inc. in 2010 and was its chief executive officer and chairman until its acquisition by Eli Lilly in 2020. Mr. Wiggans was concurrently appointed to the People and Compensation Committee and Nominating, Governance and Sustainability Committee of our board of directors.
Previous report
•In July 2026, we announced that UnitedHealthcare—the largest health insurer in the U.S. with approximately 40 million covered lives—now provides separate reimbursement for EXPAREL across outpatient settings, including hospital outpatient departments and ambulatory surgery centers. This update enables EXPAREL to be reimbursed outside of the surgical bundle for eligible UnitedHealthcare members, representing an additional step in expanding access to non-opioid postsurgical pain management options. With this addition, UnitedHealthcare joins a growing list of national payers, including Aetna, Cigna, TRICARE and Humana, as well as numerous regional plans that provide separate reimbursement for EXPAREL. In total, approximately 150 million covered lives in the U.S. now have access to separate reimbursement for EXPAREL, representing roughly half of all medically insured lives nationwide. This ensures patients have greater access to safe, effective pain management options during and after surgery without the burden of financial barriers.
Previous report
•In July 2026, we announced that we have successfully transitioned PCRX-201 (enekinragene inzadenovec), our investigational locally administered gene therapy for OA of the knee, to a U.S.-based scalable commercial manufacturing process intended to support future registrational development and commercialization. With drug product from the new manufacturing process now available, we are currently screening subjects for Part B of our Phase 2 ASCEND study. Enrollment in Part A of ASCEND concluded in June 2026, with topline data expected by the end of this year.
Previous report
ZILRETTA Clinical Benefits
Previous report
Other HCAd Product Candidates
Previous report
ZILRETTA revenue increased 4% and 9% in the three and six months ended June 30, 2026 versus 2025, respectively, due to respective 2% and 6% increases in kit volume and 2% and 3% increases in net selling price primarily due to price increases, partially offset by higher customer discounting.
Previous report
Net product sales of iovera° increased 22% and 21% in the three and six months ended June 30, 2026 versus 2025, respectively, driven by increases in Smart Tip volume of 19% and 23%, partially offset by decreases in Smart Tip net selling price of 2% and 3%. In June 2026, we entered into a Stock and Asset Purchase Agreement with Zimmer to divest iovera° for up to $140.0 million, including an upfront payment of $70.0 million. In July 2026, we received an upfront payment of $73.6 million from the closing of the Transaction that divested iovera° to Zimmer, consisting of an upfront payment of $70.0 million and $3.6 million of adjustments for cash, accounts receivable, indebtedness, transaction expenses and inventory. The Transaction closed on July 31, 2026, after which we will no longer recognize revenue associated with iovera°. For more information, see Note 3, Assets and Liabilities Held for Sale, to our condensed consolidated financial statements included herein.
Previous report
Cost of Goods Sold
Previous report
Regulatory and other expense increased 31% and 28% in the three and six months ended June 30, 2026 versus 2025, respectively, due to increased headcount within the function, as well as additional subjects enrolled in the IGOR registry study.
Previous report
Sales and marketing expense increased 2% and 4% in the three and six months ended June 30, 2026 versus 2025, respectively. The increase in the six months ended June 30, 2026 was driven by expanding our market access and reimbursement teams to strengthen our key commercial capabilities and execute on commercial payer separate reimbursement for EXPAREL.
Previous report
Other Operating Expenses (Gains), Net
Previous report
Total other operating expenses, net significantly increased in the three months ended June 30, 2026 versus 2025. Total other operating expenses, net decreased 18% in the six months ended June 30, 2026 versus 2025.
Previous report
Other Expense, Net
Previous report
Income Tax Benefit (Expense)
Previous report
In June 2026, we entered into a Stock and Asset Purchase Agreement with Zimmer to divest our iovera° business. The Transaction closed on July 31, 2026. Both parties agreed to treat the transaction as a deemed asset sale for U.S. federal income tax purposes through an election under Section 338(h)(10) of the Internal Revenue Code. As the Transaction closed subsequent to June 30, 2026, the income tax effects of the transaction, including changes in the valuation allowance for capital-loss carryforwards, were not recognized in the income tax provisions for the three and six months ended June 30, 2026. For more information, see Note 3, Assets and Liabilities Held for Sale, to our condensed consolidated financial statements included herein.
Previous report
In July 2026, we received an upfront payment of $73.6 million from the closing of the Transaction that divested iovera° to Zimmer, consisting of an upfront payment of $70.0 million and $3.6 million of adjustments for cash, accounts receivable, indebtedness, transaction expenses and inventory.
Reworded paragraphs (59)
Previous wording
This Quarterly Report on Form 10-Q and certain other communications made by us contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995, including, without limitation, statements related to: the ability to realize the anticipated benefits of the divestiture of iovera®°; the ability of Zimmer, Inc., or Zimmer (a subsidiary of Zimmer Biomet Holdings, Inc.), to unlock the full potential of iovera°; '5x30', our growth and business strategy, our future outlook, the strength and efficacy of our intellectual property protection and patent terms, our future growth potential and future financial and operating results and trends, our plans, objectives, expectations (financial or otherwise) and intentions, including our plans with respect to the repayment of our indebtedness, anticipated product portfolio and product development programs, strategic alliances, plans with respect to the Non-Opioids Prevent Addiction in the Nation (“NOPAIN”) Act and any other statements that are not historical facts. For this purpose, any statement that is not a statement of historical fact should be considered a forward-looking statement. We often use the words “anticipate,” “believe,” “can,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “should,” “will,” “would” and similar expressions to help identify forward-looking statements. We cannot assure you that our estimates, assumptions and expectations will prove to have been correct. Actual results may differ materially from these indicated by such forward-looking statements as a result of various important factors, including risks relating to, among others: risks associated with acquisitions, such as the risk that the acquired businesses and/or assets will not be integrated successfully, that such integration may be more difficult, time-consuming or costly than expected or that the expected benefits of the transaction will not occur; risks associated with divestitures; our manufacturing and supply chain, global and United States, or U.S., economic conditions (including tariffs, inflation and rising interest rates), and our business, including our revenues, financial condition, cash flows and results of operations; the success of our sales and manufacturing efforts in support of the commercialization of EXPAREL® (bupivacaine liposome injectable suspension) and ZILRETTA® (triamcinolone acetonide extended-release injectable suspension); the rate and degree of market acceptance of EXPAREL and ZILRETTA; the size and growth of the potential markets for EXPAREL and ZILRETTA and our ability to serve those markets; our plans to expand the use of EXPAREL and ZILRETTA to additional indications and opportunities, and the timing and success of any related clinical trials for EXPAREL, ZILRETTA, and any of our other product candidates, including, but not limited to, PCRX-201 (eneki…
Excerpt shortened here; the source contains the full paragraph.
Current wording
This Quarterly Report on Form 10-Q and certain other communications made by us contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995, including, without limitation, statements related to: the proposed Merger (as defined below); the expected timetable for completing the proposed Merger, the anticipated benefits and synergies of the proposed Merger, the ability to complete the proposed Merger or to satisfy the various closing conditions; the ability to realize the anticipated benefits of the divestiture of iovera®°; the ability of Zimmer, Inc., or Zimmer (a subsidiary of Zimmer Biomet Holdings, Inc.), to unlock the full potential of iovera°; '5x30', our growth and business strategy, our future outlook, the strength and efficacy of our intellectual property protection and patent terms, our future growth potential and future financial and operating results and trends, our plans, objectives, expectations (financial or otherwise) and intentions, including our plans with respect to the repayment of our indebtedness, anticipated product portfolio and product development programs, strategic alliances, plans with respect to the Non-Opioids Prevent Addiction in the Nation (“NOPAIN”) Act and any other statements that are not historical facts. For this purpose, any statement that is not a statement of historical fact should be considered a forward-looking statement. We often use the words “anticipate,” “believe,” “can,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “should,” “will,” “would” and similar expressions to help identify forward-looking statements. We cannot assure you that our estimates, assumptions and expectations will prove to have been correct. Actual results may differ materially from these indicated by such forward-looking statements as a result of various important factors, including risks relating to, among others: risks related to Viatris Inc.’s (as defined below) ability to complete the transaction on the proposed terms and schedule or at all; whether the conditions of a tender offer will be satisfied; whether sufficient stockholders of Pacira will tender their shares in the transaction; the outcome of legal proceedings instituted against Pacira and/or others relating to the transaction; the failure (or delay) to receive the required regulatory approvals relating to the transaction; the possibility that competing offers will be made; risks related to future opportunities and plans for Pacira and its products, the occurrence of any event, change, or other circumstance that could give rise to the termination of the acquisition agreement, as well as other risks related to Pacira’s and Viatris’ businesses detailed from time-to-time under the caption “Risk Factors” and elsewhere in Pacira’s and Viatris’ respective SEC filings and reports, including their respective Annual Reports …
Excerpt shortened here; the source contains the full paragraph.
Previous wording
The forward-looking statements included in this Quarterly Report on Form 10-Q represent our views as of the filing date of this Quarterly Report on Form 10-Q. Important factors could cause our actual results to differ materially from those indicated or implied by forward-looking statements, and as such we anticipate that subsequent events and developments will cause our views to change. Except as required by applicable law, we undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, and readers should not rely on the forward-looking statements as representing our views as of any date subsequent to the date of the filing of this Quarterly Report on Form 10-Q.
Current wording
The forward-looking statements included in this Quarterly Report on Form 10-Q represent our views as of the filing date of this Quarterly Report on Form 10-Q. These forward-looking statements, other than the statements regarding the proposed acquisition by Viatris, do not assume the consummation of the proposed acquisition unless specifically stated otherwise. Important factors could cause our actual results to differ materially from those indicated or implied by forward-looking statements, and as such we anticipate that subsequent events and developments will cause our views to change. Except as required by applicable law, we undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, and readers should not rely on the forward-looking statements as representing our views as of any date subsequent to the date of the filing of this Quarterly Report on Form 10-Q.
Previous wording
Pacira’s mission is to deliver innovative, non-opioid pain therapies to transform the lives of patients. We are focused in two therapeutic areas as defined by the indications within our approved commercial portfolio and the indications we are pursuing within our clinical development pipeline. One area is postsurgical pain control and the second is early intervention osteoarthritis, or OA, pain management. EXPAREL is our long-acting, non-opioid analgesic for postsurgical pain control. EXPAREL utilizes our unique pMVL drug delivery technology that encapsulates drugs without altering their molecular structure and releases them over a desired period of time. In the U.S., EXPAREL is the only product indicated for local analgesia via infiltration in patients aged six years and older and regional analgesia via interscalene brachial plexus nerve block, sciatic nerve block in the popliteal fossa and adductor canal block in adults. In Europe, EXPAREL is approved as a brachial plexus block or femoral nerve block for treatment of post-operative pain in adults, and as a field block for treatment of somatic post-operative pain from small- to medium-sized surgical wounds in adults and children aged six years and older. We drop-ship EXPAREL directly to end-users based on orders placed to wholesalers or directly to us. ZILRETTA is our extended-release corticosteroid approved to manage OA knee pain. With a single injection, ZILRETTA can significantly reduce knee pain for three months of relief. ZILRETTA is a potential alternative to hyaluronic acid, or HA, platelet rich plasma injections or other early intervention treatments. EXPAREL and ZILRETTA are highly complementary products as long-acting, non-opioid therapies that alleviate pain. We are also advancing two Phase 2 clinical programs—PCRX-201 (enekinragene inzadenovec), a novel, locally administered gene therapy for the treatment of OA of the knee, and PCRX-2002, a complementary, long-acting formulation of the non-opioid analgesic ropivacaine for postsurgical pain control. PCRX-201 is the lead program from our proprietary high-capacity adenovirus, or HCAd, vector platform, which enables local administration of genetic medicines and has the potential to unlock gene therapy for large prevalent diseases affecting millions of people.
Current wording
Pacira’s mission is to deliver innovative, non-opioid pain therapies to transform the lives of patients. We are focused in two therapeutic areas as defined by the indications within our approved commercial portfolio and the indications we are pursuing within our clinical development pipeline. One area is postsurgical pain control and the second is early intervention osteoarthritis, or OA, pain management. EXPAREL is our long-acting, non-opioid analgesic for postsurgical pain control. EXPAREL utilizes our unique pMVL drug delivery technology that encapsulates drugs without altering their molecular structure and releases them over a desired period of time. In the U.S., EXPAREL is the only product indicated for postsurgical analgesia using any of the following methods of administration: (i) local analgesia via infiltration in patients aged 6 years and older; (ii) regional analgesia via an interscalene brachial plexus nerve block in adults; (iii) regional analgesia via a sciatic nerve block in the popliteal fossa in adults or (iv) regional analgesia via an adductor canal block in adults. In Europe, EXPAREL is approved as a brachial plexus block or femoral nerve block for treatment of post-operative pain in adults, and as a field block for treatment of somatic post-operative pain from small- to medium-sized surgical wounds in adults and children aged six years and older. We drop-ship EXPAREL directly to end-users based on orders placed to wholesalers or directly to us. ZILRETTA is our extended-release corticosteroid approved to manage OA knee pain. With a single injection, ZILRETTA can significantly reduce knee pain for three months of relief. ZILRETTA is a potential alternative to hyaluronic acid, or HA, platelet rich plasma injections or other early intervention treatments. EXPAREL and ZILRETTA are highly complementary products as long-acting, non-opioid therapies that alleviate pain. We are also advancing two Phase 2 clinical programs—PCRX-201 (enekinragene inzadenovec), a novel, locally administered gene therapy for the treatment of OA of the knee, and PCRX-2002, a complementary, long-acting formulation of the non-opioid analgesic ropivacaine for postsurgical pain control. PCRX-201 is the lead program from our proprietary high-capacity adenovirus, or HCAd, vector platform, which enables local administration of genetic medicines and has the potential to unlock gene therapy for large prevalent diseases affecting millions of people.
Previous wording
We expect to continue to invest in commercial resources to expand the utilization of EXPAREL and ZILRETTA; advance regulatory activities for EXPAREL and ZILRETTA, and progress our clinical-stage product candidates—including PCRX-201 and PCRX-2002; expand and enhance our commercial manufacturing efficiencies; invest in new products, businesses and technologies through business development; and support legal matters.
Current wording
We expect to continue to invest in commercial resources to expand the utilization of EXPAREL and ZILRETTA; advance regulatory activities for EXPAREL and ZILRETTA, and progress our clinical-stage pipeline—including PCRX-201 and PCRX-2002; expand and enhance our commercial manufacturing efficiencies; invest in new products, businesses and technologies through business development; and support legal matters.
Previous wording
In July 2026, we completed the divestiture of iovera°, a handheld cryoanalgesia device that delivers immediate, long-acting, drug-free pain control using precise, controlled doses of cold temperature to a targeted nerve, to Zimmer, Inc., a subsidiary of Zimmer Biomet Holdings, Inc. (“Zimmer”). For more information, see Note 3, Assets and Liabilities Held for Sale, to our condensed consolidated financial statements included herein.
Current wording
In July 2026, we completed the divestiture of iovera°, a handheld cryoanalgesia device that delivers immediate, long-acting, drug-free pain control using precise, controlled doses of cold temperature to a targeted nerve, to Zimmer, Inc., a subsidiary of Zimmer Biomet Holdings, Inc. (“Zimmer”) (collectively, the “Divestiture”) for up to $140.0 million. For more information, see Note 3, iovera° Divestiture, to our condensed consolidated financial statements included herein.
Previous wording
While we have not experienced a material impact from tariffs to date, the current macroeconomic environment remains dynamic and subject to rapid and potentially material change. Our business may be adversely impacted by ongoing risks associated with global macroeconomic conditions, including international relations and trade disputes. In particular, EXPAREL and ZILRETTA are manufactured into finished dosage by a contract development and manufacturing organization in the United Kingdom, or U.K., and the active pharmaceutical ingredients, or API, for both products are sourced primarily from the European Union, or E.U., or Switzerland. On April 2, 2026, the President of the U.S. issued a proclamation under Section 232 of the Trade Expansion Act of 1962, imposing tariffs on certain pharmaceutical products imported to the U.S. This order (the “Presidential Order”) applies to patented pharmaceutical products, associated APIs and other products classified under Harmonized Tariff Schedule (HTS) U.S. codes listed in Annex I. The Presidential Order imposes country-specific tariffs, including 15% tariffs on certain products imported from the E.U., Japan, South Korea, Switzerland and Liechtenstein; and a 10% tariff on products imported from the U.K. with a potential reduction to 0%, subject to a future U.S. and U.K. pharmaceutical pricing agreement. Patented pharmaceutical products imported from certain other countries may be subject to tariffs of up to 100%. As a result, we expect tariffs will impact our products and/or their ingredients imported into the U.S. However, tariff rates can change quickly and unexpectedly. We will continue to monitor developments and assess any potential impacts and related trade measures on our business and supply chain.
Current wording
While we have not experienced a material impact from tariffs to date, the current macroeconomic environment remains dynamic and subject to rapid and potentially material change. Our business may be adversely impacted by ongoing risks associated with global macroeconomic conditions, including international relations and trade disputes. In particular, EXPAREL and ZILRETTA are manufactured into finished dosage by a contract development and manufacturing organization in the United Kingdom, or U.K., and the active pharmaceutical ingredients, or API, for both products are sourced primarily from the European Union, or E.U., or Switzerland. On April 2, 2026, the President of the U.S. issued Proclamation 11020 under Section 232 of the Trade Expansion Act of 1962, as amended (the “Proclamation”), imposing tariffs on imports of certain pharmaceutical products into the Proclamation, as modified, applies to patented pharmaceutical products and their associated APIs and key starting materials classified under the provisions of the Harmonized Tariff Schedule of the U.S., listed in Annex I to the Proclamation. The applicable rate depends on, among other things, the country of origin of the imported product. The Proclamation imposes a default tariff rate of 100% and country-specific rates, including a total rate of 15% for covered products of the E.U., Japan, South Korea, Switzerland and Liechtenstein. However, tariff rates can change quickly and unexpectedly. We will continue to monitor developments and assess any potential impacts and related trade measures on our business and supply chain.
Previous wording
Such tariffs imposed by the U.S. and/or other countries that are currently in effect, or may take effect in the future, could increase our manufacturing and operating expenses in future periods, including the cost to deliver our products to commercial markets, the cost to source raw materials for the manufacturing of our products and the cost of materials used in our research and development activities. The previous imposition of tariffs and future tariffs impacting our industry, the magnitude of response by other countries to such tariffs and the length of time such tariffs are in effect may also increase uncertainty and adversely impact our business.
Current wording
Tariffs imposed by the U.S. and/or other countries that are currently in effect, or may take effect in the future, could increase our manufacturing and operating expenses in future periods, including the cost to deliver our products to commercial markets, the cost to source raw materials for the manufacturing of our products and the cost of materials used in our research and development activities. The previous imposition of tariffs and future tariffs impacting our industry, the magnitude of response by other countries to such tariffs and the length of time such tariffs are in effect may also increase uncertainty and adversely impact our business.
Previous wording
We currently expect that tariffs will have a negative impact on gross margins. We are currently evaluating the magnitude of this impact but are unable to quantify the expected impact with specificity at this time due to the rapidly changing political policy environment. There has been significant volatility in U.S. tariff and customs policy recently, with frequent changes in rates, sudden elimination or reinstatement of exemptions, shifts in implementation dates and reversals of prior actions. This volatility makes it more difficult to forecast costs, plan our global supply chain and provide reliable financial guidance. Policy changes often require rapid operational adjustments that can increase costs and reduce efficiency. We expect such volatility and uncertainty related to tariffs and customs to continue, potentially posing ongoing challenges to our operations, financial planning and investor communications.
Current wording
We currently expect that tariffs will have a negative impact on gross margins. The estimated impact to the 2026 financial results is not expected to be material. The expected impact may change due to the rapidly changing political policy environment. There has been significant volatility in U.S. tariff and customs policy recently, with frequent changes in rates, sudden elimination or reinstatement of exemptions, shifts in implementation dates and reversals of prior actions. This volatility makes it more difficult to forecast costs, plan our global supply chain and provide reliable financial guidance. Policy changes often require rapid operational adjustments that can increase costs and reduce efficiency. We expect such volatility and uncertainty related to tariffs and customs to continue, potentially posing ongoing challenges to our operations, financial planning and investor communications.
Previous wording
In the U.S., EXPAREL is currently indicated for local analgesia via infiltration in patients aged six years and older and regional analgesia via interscalene brachial plexus nerve block, sciatic nerve block in the popliteal fossa, and adductor canal block in adults. Safety and efficacy have not been established in other nerve blocks. In Europe, EXPAREL is approved as a brachial plexus block or femoral nerve block for treatment of post-operative pain in adults, and as a field block for treatment of somatic post-operative pain from small- to medium-sized surgical wounds in adults and children aged six years and older. We are currently advancing a registration program for EXPAREL in pediatric patients under six years of age.
Current wording
In the U.S., EXPAREL is currently indicated for local analgesia via infiltration in patients aged six years and older and regional analgesia via interscalene brachial plexus nerve block, sciatic nerve block in the popliteal fossa, and adductor canal block in adults. Safety and efficacy have not been established in other nerve blocks. In Europe, EXPAREL is approved as a brachial plexus block or femoral nerve block for treatment of post-operative pain in adults, and as a field block for treatment of somatic post-operative pain from small- to medium-sized surgical wounds in adults and children aged six years and older. We are currently advancing a registration program for EXPAREL in pediatric patients under six years of age. Since its initial approval in 2011, more than 20 million patients have been treated with EXPAREL.
Previous wording
We are advancing a Phase 3 registration study to evaluate the safety and efficacy of ZILRETTA for the management of OA pain of the shoulder and concluded patient enrollment in April 2026. If the study is successful, we plan to seek approval to expand the ZILRETTA label to include OA pain of the shoulder, which could make ZILRETTA the first product with such an on-label indication.
Current wording
We have concluded enrollment in a Phase 3 registration study to evaluate the safety and efficacy of ZILRETTA for the management of OA pain of the shoulder and expect to report topline results before the end of 2026. If the study is successful, we plan to seek approval to expand the ZILRETTA label to include OA pain of the shoulder, which could make ZILRETTA the first product with such an on-label indication.
Previous wording
We are currently sponsoring a prospective, real-world registry called the Innovations in Genicular Outcomes Registry, or IGOR, which is a patient-focused registry governed in collaboration with a steering committee of scientific experts that evaluates clinical, economic- and health-related patient-reported outcomes in patients who have received any treatment for knee OA pain, including total knee arthroplasty, or TKA, for a minimum of 18 months. A unique feature of IGOR is that if patients receive additional treatments for OA, data capture resets so that outcomes of their treatment journey can be followed over multiple years. Unlike in clinical studies, treatment decisions in IGOR are decided by physicians and patients in a shared decision-making manner rather than being driven by treatment assignment, so that outcomes are truly those from real-world applications. The IGOR registry is tracking outcomes of ZILRETTA and EXPAREL, along with iovera° and comparator treatments. In addition, the IGOR registry is tracking outcomes for OA and TKA related to our product candidates PCRX-201 and PCRX-2002.
Current wording
We are currently sponsoring the Innovations in Genicular Outcomes Registry, or IGOR, a first-of-its-kind multicenter, prospective, long-term registry collecting extensive real-world characteristics and impact data of various interventions that patients receive throughout their treatment journey for OA of the knee. This patient-focused registry is governed in collaboration with a steering committee of scientific experts that evaluates clinical, economic- and health-related patient-reported outcomes in patients who have received any treatment for knee OA pain, including total knee arthroplasty, or TKA, for a minimum of 18 months. A unique feature of IGOR is that if patients receive additional treatments for OA, data capture resets so that outcomes of their treatment journey can be followed over multiple years. Unlike in clinical studies, treatment decisions in IGOR are decided by physicians and patients in a shared decision-making manner rather than being driven by treatment assignment, so that outcomes are truly those from real-world applications. The IGOR registry is tracking outcomes of ZILRETTA and EXPAREL, along with iovera° and comparator treatments. In addition, the IGOR registry is tracking outcomes for OA and TKA to support our clinical-stage programs, such as PCRX-201. With over 4,000 patients enrolled since 2021, this robust knee OA database is generating valuable insights into a range of interventions.
Previous wording
The patient journey for OA knee pain often spans decades, and requires ongoing management across multiple stages of disease progression. Current treatments target symptoms through lifestyle modifications, physical therapy and pharmacological treatments, such as over-the-counter or prescription nonsteroidal anti-inflammatory drugs (NSAIDS) and intraarticular corticosteroids or HA. Ultimately, late-stage disease often leads to surgical intervention, such as TKA.
Current wording
The patient journey for OA knee pain often spans decades and requires ongoing management across multiple stages of disease progression. Current treatments target symptoms through lifestyle modifications, physical therapy and pharmacological treatments, such as over-the-counter or prescription nonsteroidal anti-inflammatory drugs (NSAIDs) and intraarticular knee injections such as corticosteroids or HA. Ultimately, late-stage disease often leads to surgical intervention, such as TKA.
Previous wording
We have completed patient enrollment in Part A of the study with a total of 49 patients randomized. We are currently screening subjects for Part B of the Phase 2 ASCEND study. Part B will randomize approximately 90 patients. The drug product used in Part B of the study will be manufactured using our newly developed, suspension-based batch manufacturing process intended for commercial scale-up. We expect to report topline twelve-month data results from Part A of the ASCEND study before the end of 2026.
Current wording
We have completed patient enrollment in Part A of the study with a total of 49 patients randomized. In August 2026, we dosed the first patient in, and are now currently enrolling additional subjects for, Part B of the Phase 2 ASCEND study. Part B will randomize approximately 90 patients. The drug product used in Part B of the study will be manufactured using our newly developed, suspension-based batch manufacturing process intended for commercial scale-up. We expect to report topline twelve-month results from Part A of the ASCEND study before the end of 2026.
Previous wording
We also recently received an important validation of our PCRX-201 program with the acceptance of a Phase 1 manuscript for publication. The publication will appear in the Annals of the Rheumatic Diseases, a world-leading peer-reviewed rheumatology journal. The paper highlights the encouraging results from the 72-patient Phase 1 study supporting further development of PCRX-201.
Current wording
We also recently received an important validation of our PCRX-201 program with the publication of our Phase 1 study in the Annals of the Rheumatic Diseases, a world-leading peer-reviewed rheumatology journal. The paper summarizes positive two-year results from the 72-patient Phase 1 study supporting further development of PCRX-201.
Previous wording
In November 2025, we announced an exclusive worldwide license agreement with AmacaThera, Inc., or AmacaThera, a clinical-stage biotechnology company specializing in drug delivery, for the development and commercialization of PCRX-2002 (previously known by AmacaThera as AMT-143). PCRX-2002 is a long-acting formulation of the non-opioid analgesic ropivacaine for postsurgical pain. It is a slow-release, non-opioid local analgesic providing long-acting post-operative pain relief. PCRX-2002 is administered via instillation at the time of the surgery and utilizes AmacaThera’s innovative hydrogel platform, a fast-gelling physical hydrogel composed of two well-established polymers enabling slow-release while minimizing systemic side effects. It is delivered via a conventional syringe and rapidly forms a depot as it warms to body temperature. In a Phase 1 study, PCRX-2002 demonstrated sustained release of ropivacaine through 14 days. We expect to initiate a Phase 2 program in bunionectomy later this year in Canada.
Current wording
PCRX-2002 was added to our pipeline in November 2025 in connection with entering into an exclusive worldwide license agreement with AmacaThera, Inc., or AmacaThera, a clinical-stage biotechnology company, for the development and commercialization of PCRX-2002 (previously known by AmacaThera as AMT-143).
Previous wording
In addition to PCRX-201, we currently have prioritized three other preclinical HCAd-based gene therapy programs that we believe have disease modifying potential in other painful conditions. These include Investigational New Drug (IND) enabling studies of PCRX-1002 for Dry Eye Disease and PCRX-1003 for Degenerative Disc Disease. We are also advancing a preclinical program for PCRX-1001 in canine OA, recently completed a pilot safety study and our pilot efficacy study is now initiating. We believe this indication offers significant out-licensing potential.
Current wording
In addition to PCRX-201, we currently have prioritized three early-stage HCAd-based gene therapy programs that we believe have disease modifying potential in other painful conditions. PCRX-1001 is advancing in a pilot efficacy study in canine OA. If successful, we believe this program offers significant out-licensing potential. In addition, PCRX-1001 may represent an important validation of an HCAd-based construct expressing two genes. In parallel, we are advancing IND-enabling studies for PCRX-1002 for Dry Eye Disease and PCRX-1003 for Degenerative Disc Disease.
Previous wording
In January 2026, we and LG Chem, Ltd., or LG Chem, entered into a partnership agreement to expand access to EXPAREL in select Asian–Pacific markets. Under the terms of the partnership, LG Chem has the exclusive rights to commercialize EXPAREL in the region. We will receive a contractually stated price and tiered royalties on future commercial sales by LG Chem in its licensed territories. We will manufacture EXPAREL and LG Chem will be responsible for securing regulatory approvals in the licensed territories. LG Chem has filed for marketing authorization in South Korea and plans to do so in Thailand in the second half of 2026. We currently expect that revenue under this partnership will begin in 2027 and extend into the mid-2040s.
Current wording
In January 2026, we entered into a partnership agreement with LG Chem, Ltd., or LG Chem, to expand access to EXPAREL in select Asian–Pacific markets. Under the terms of the partnership, LG Chem has the exclusive rights to commercialize EXPAREL in the region. We will receive a contractually stated price and tiered royalties on future commercial sales by LG Chem in its licensed territories. We will manufacture EXPAREL and LG Chem will be responsible for securing regulatory approvals in the licensed territories. LG Chem has filed for marketing authorization in South Korea and plans to do so in Thailand in the second half of 2026. We currently expect that revenue under this partnership will begin in 2027 and extend into the mid-2040s.
Previous wording
Comparison of the Three and Six Months Ended June 30, 2026 and 2025
Current wording
Comparison of the Three and Nine Months Ended September 30, 2026 and 2025
Previous wording
Our net product sales are primarily within the U.S. and consist of EXPAREL, ZILRETTA and sales of bupivacaine liposome injectable suspension for veterinary use. Royalty revenues are related to the sale of bupivacaine liposome injectable suspension for veterinary use. In June 2026, we entered into a Stock and Asset Purchase Agreement with Zimmer to divest iovera°. Net product sales of iovera° will be recognized through the completion of the Transaction on July 31, 2026, after which we will no longer recognize revenue associated with iovera°.
Current wording
Our net product sales are primarily within the U.S. and consist of EXPAREL, ZILRETTA and sales of bupivacaine liposome injectable suspension for veterinary use. Royalty revenues are related to the sale of bupivacaine liposome injectable suspension for veterinary use. In June 2026, we entered into a Stock and Asset Purchase Agreement with Zimmer to divest iovera° (the “Purchase Agreement”). Net product sales of iovera° were recognized through the completion of the Divestiture on July 31, 2026, after which we no longer recognize revenue associated with iovera°. Service revenues are related to a development and commercialization agreement with Zimmer.
Previous wording
EXPAREL revenue increased 3% and 4% in the three and six months ended June 30, 2026 versus 2025, respectively. Components of the increase included a 4% and 6% increase in gross vial volume in the three and six months ended June 30, 2026 versus 2025, respectively, partially offset by a shift in product mix, and a less than 1% lower net selling price in both periods, as group purchasing organization contracting discounts more than offset a price increase.
Current wording
For the three months ended September 30, 2026 versus 2025, EXPAREL revenue increased 2%, driven by a 2% increase in gross vial volume, partially offset by a shift in product mix. Net selling price increased less than 1%, due to a January 2026 price increase that was partially offset by higher discounting and payer rebates. For the nine months ended September 30, 2026 versus 2025, EXPAREL revenue increased 3%, driven by a 4% increase in gross vial volume, partially offset by a shift in product mix.
Previous wording
Bupivacaine liposome injectable suspension revenue increased by more than 100% and 41% in the three and six months ended June 30, 2026 versus 2025, respectively, due to supply price increases and the timing of orders placed by our commercial partner for veterinary use. The related royalties also increased by more than 100% and decreased 8% in the three and six months ended June 30, 2026 versus 2025, respectively, primarily due to both the timing of orders and the sales mix of vial sizes.
Current wording
Bupivacaine liposome injectable suspension revenue decreased 56% and 4% in the three and nine months ended September 30, 2026 versus 2025, respectively, due to the timing of orders placed by our commercial partner for veterinary use. There were no related royalties in the three months and a decrease of 46% in the nine months ended September 30, 2026 versus 2025, respectively, primarily due to both the timing of orders and the sales mix of vial sizes.
Previous wording
The following tables provide a summary of activity with respect to our sales-related allowances and accruals related to EXPAREL and ZILRETTA for the six months ended June 30, 2026 and 2025 (in thousands):
Current wording
The following tables provide a summary of activity with respect to our sales-related allowances and accruals related to EXPAREL and ZILRETTA for the nine months ended September 30, 2026 and 2025 (in thousands):
Previous wording
Total reductions of gross product sales from sales-related allowances and accruals were $124.1 million and $96.7 million, or 25.2% and 21.7% of gross product sales, for the six months ended June 30, 2026 and 2025, respectively. The overall 3.5% increase in sales-related allowances and accruals as a percentage of gross product sales was primarily related to accruals as a result of higher chargeback-related allowances from expanded contracting efforts and increased product returns due to weather-related disruptions in the first quarter of 2026.
Current wording
Total reductions of gross product sales from sales-related allowances and accruals were $187.5 million and $150.0 million, or 25.7% and 22.1% of gross product sales, for the nine months ended September 30, 2026 and 2025, respectively. The overall 3.6% increase in sales-related allowances and accruals as a percentage of gross product sales was primarily related to accruals as a result of higher chargeback-related allowances, payer rebates and administrative fees from expanded contracting efforts and increased product returns due to weather-related disruptions in the first quarter of 2026.
Previous wording
Cost of goods sold primarily relates to the costs to produce, package and deliver our products to customers. These expenses include labor, raw materials, manufacturing overhead and occupancy costs, depreciation of facilities, quality control and engineering.
Current wording
Cost of sales includes cost of goods sold and cost of service. Cost of goods sold primarily relates to the costs to produce, package and deliver our products to customers. These expenses include labor, raw materials, manufacturing overhead and occupancy costs, depreciation of facilities, quality control and engineering. Cost of service is related to the development and commercialization agreement with Zimmer related to the label expansion of iovera° in the field of spasticity.
Previous wording
The following table provides information regarding our cost of goods sold and gross margin during the periods indicated, including percent changes (dollar amounts in thousands):
Current wording
The following table provides information regarding our cost of sales and gross margin during the periods indicated, including percent changes (dollar amounts in thousands):
Previous wording
Gross margin was flat and decreased one percentage point in the three and six months ended June 30, 2026 versus 2025, respectively, due to higher EXPAREL product costs resulting from lower production volumes. Production volumes were higher in the prior year in order to achieve higher inventory levels to meet increased demand. This was substantially offset by fewer inventory reserves and less downtime in the current year.
Current wording
Gross margin decreased two percentage points in the three months ended September 30, 2026 versus 2025 primarily due to higher ZILRETTA product costs resulting from lower production volumes and higher inventory reserves. Gross margin decreased one percentage point in the nine months ended September 30, 2026 versus 2025 primarily due to higher EXPAREL and ZILRETTA product costs resulting from lower production volumes. Production volumes were higher in the prior year in order to achieve higher inventory levels to meet increased demand.
Previous wording
Research and development, or R&D, expenses primarily consist of costs related to clinical trials and related outside services, product development and other R&D costs, including trials that we are conducting to generate new data for EXPAREL, ZILRETTA and iovera°, clinical trials for PCRX-201 and PCRX-2002 and stock-based compensation expense. Clinical and preclinical development expenses include costs for clinical personnel, clinical trials performed by third-parties, materials and supplies, database management and other third-party fees. Product development expenses include development costs for our products, which include personnel, research equipment, materials and contractor costs for process development and product candidates, and facility costs for our research space. Regulatory and other expenses include regulatory activities related to unapproved products and indications, medical information and scientific communication expenses, expenses related to our IGOR registry study and related personnel. Stock-based compensation expense relates to the costs of stock option grants, awards of restricted stock units, or RSUs, and performance share units, or PSUs, and our employee stock purchase plan, or ESPP. Additionally, as part of the acquisition of GQ Bio Therapeutics GmbH, or GQ Bio, in February 2025 (the “GQ Bio Acquisition”), expenses related to a key employee holdback are also included in product development.
Current wording
Research and development, or R&D, expenses primarily consist of costs related to clinical trials and related outside services, product development and other R&D costs, including trials that we are conducting to generate new data for EXPAREL and ZILRETTA, clinical trials for PCRX-201 and PCRX-2002 and stock-based compensation expense, as well as trials for iovera° previously conducted prior to the Divestiture. Clinical and preclinical development expenses include costs for clinical personnel, clinical trials performed by third-parties, materials and supplies, database management and other third-party fees. Product development expenses include development costs for our products, which include personnel, research equipment, materials and contractor costs for process development and product candidates, and facility costs for our research space. Regulatory and other expenses include regulatory activities related to unapproved products and indications, medical information and scientific communication expenses, expenses related to our IGOR registry study and related personnel. Stock-based compensation expense relates to the costs of stock option grants, awards of restricted stock units, or RSUs, and performance share units, or PSUs, and our employee stock purchase plan, or ESPP. Additionally, as part of the acquisition of GQ Bio Therapeutics GmbH, or GQ Bio, in February 2025 (the “GQ Bio Acquisition”), expenses related to a key employee holdback are also included in product development.
Previous wording
Total R&D expense increased 7% and 8% in the three and six months ended June 30, 2026 versus 2025, respectively.
Current wording
Total R&D expense increased 3% and 6% in the three and nine months ended September 30, 2026 versus 2025, respectively.
Previous wording
Clinical and preclinical development expense decreased 24% and 11% in the three and six months ended June 30, 2026 versus 2025, respectively, primarily due to the completion of patient enrollment in Part A of our PCRX-201 Phase 2 ASCEND trial for knee OA, the ZILRETTA Shoulder OA trial, the iovera° Spasticity trial, as well as completion of an EXPAREL Phase 1 trial for intrathecal administration. Additional reductions were driven by fewer Investigator Initiated Trial (IIT) milestones achieved. In the three months ended June 30, 2026 versus 2025, these decreases were partially offset by start-up expenses related to the PCRX-2002 Phase 2 bunionectomy trial. For the six months ended June 30, 2026 versus 2025, these decreases were also partially offset by ongoing enrollment in cohort 2 of our EXPAREL pediatric trial.
Current wording
Clinical and preclinical development expense decreased 12% in both the three and nine months ended September 30, 2026 versus 2025 primarily due to the conclusion of patient enrollment in the second quarter of 2026 for our ZILRETTA study in shoulder OA and iovera° registrational study in spasticity, as well as completion of an EXPAREL Phase 1 trial for intrathecal administration in January 2025 and a reduction in expenses resulting from the iovera° Divestiture. Fewer IIT milestones also contributed to the decrease. For the nine months ended September 30, 2026 versus 2025, reductions were also due to the completion of patient enrollment in Part A of our PCRX-201 Phase 2 ASCEND trial for knee OA (November 2025). In the three and nine months ended September 30, 2026 versus 2025, these decreases were partially offset by the initiation of Part B of our PCRX-201 Phase 2 ASCEND trial for knee OA and start-up expenses related to the PCRX-2002 Phase 2 bunionectomy trial.
Previous wording
Product development expense increased 48% and 36% in the three and six months ended June 30, 2026 versus 2025, respectively, due to continued investment in our HCAd platform, primarily for the PCRX-201 program. In addition, we recorded $0.6 million and $1.5 million in the three and six months ended June 30, 2026, respectively, related to a key employee holdback from the GQ Bio Acquisition.
Current wording
Product development expense increased 39% and 37% in the three and nine months ended September 30, 2026 versus 2025, respectively, due to continued investment in our HCAd platform, primarily for the PCRX-201 program, partially offset by a reduction in expenses resulting from the iovera° Divestiture.
Previous wording
Stock-based compensation expense increased 8% in the three months ended June 30, 2026 versus 2025 primarily due to the acceleration of stock-based compensation awards related to a terminated employee. Stock-based compensation decreased 5% in the six months ended June 30, 2026 versus 2025 primarily due to the forfeiture of equity awards in the current periods.
Current wording
Stock-based compensation expense decreased 30% and 13% in the three and nine months ended September 30, 2026, respectively, versus 2025 primarily due to the forfeiture of equity awards in the current periods by employees that were related to the Divestiture.
Previous wording
Sales and marketing expenses primarily consist of compensation and benefits for our sales force and personnel that support our commercial, sales, marketing, medical and scientific affairs operations, and insights and analytics. They also include expenses related to the commercialization of our products—including marketing, health outcome communications, provider-level market access, patient reimbursement support and customer educational programs. General and administrative expenses consist of compensation and benefits for legal, finance, regulatory activities related to approved products and indications, compliance, information technology, human resources, business development, executive management and other supporting personnel. It also includes professional fees for legal, audit, tax and consulting services. Stock-based compensation expense relates to the costs of stock option grants, awards of RSUs, PSUs and our ESPP.
Current wording
Sales and marketing expenses primarily consist of compensation and benefits for our sales force and personnel that support our commercial, sales, marketing, medical and scientific affairs operations, and insights and analytics. They also include expenses related to the commercialization of our products—including marketing, health outcome communications, provider-level market access, patient reimbursement support and customer educational programs. General and administrative expenses consist of compensation and benefits for legal, finance, regulatory activities related to approved products and indications, compliance, information technology, human resources, business development, executive management and other supporting personnel. They also include professional fees for legal, audit, tax and consulting services. Stock-based compensation expense relates to the costs of stock option grants, awards of RSUs, PSUs and our ESPP.
Previous wording
Total selling, general and administrative expense increased 4% and 6% in the three and six months ended June 30, 2026 versus 2025, respectively.
Current wording
Total selling, general and administrative expense decreased 9% and increased 1% in the three and nine months ended September 30, 2026 versus 2025, respectively.
Previous wording
General and administrative expense increased 11% and 17% in the three and six months ended June 30, 2026 versus 2025, respectively, primarily driven by a 2025 recovery of $5.2 million in legal expenses related to litigation pertaining to the acquisition of MyoScience, Inc., third party investor relations advisory services, as well as increased headcount in our business development, procurement and legal departments. The three months ended June 30, 2026 included additional costs related to the solicitation of proxies in connection with a contested election of directors at our 2026 annual meeting of stockholders that we would not typically have incurred in the absence of a contested election.
Current wording
General and administrative expense increased 12% and 15% in the three and nine months ended September 30, 2026 versus 2025, respectively, primarily driven by increased legal fees for ongoing litigation. In addition, the nine months ended September 30, 2026 increase included costs related to the solicitation of proxies in connection with a contested election of directors at our 2026 annual meeting of stockholders that we would not typically have incurred in the absence of a contested election, while the prior period included a 2025 recovery of $5.2 million in legal expenses related to litigation pertaining to the acquisition of MyoScience, Inc.
Previous wording
Stock-based compensation expense decreased 7% and 6% for the three and six months ended June 30, 2026 versus 2025, respectively, primarily due to the prior year equity compensation related to our former Chief Executive Officer whose post-employment consulting services ceased in August 2025.
Current wording
Stock-based compensation expense decreased 13% and 8% for the three and nine months ended September 30, 2026 versus 2025, respectively, primarily due to the prior year having included stock-based compensation for our former Chief Executive Officer whose post-employment consulting services concluded in August 2025.
Previous wording
As part of the acquisitions of Flexion Therapeutics, Inc., or Flexion, (in 2021) and MyoScience, Inc. (in 2019), we acquired intangible assets consisting of developed technology intangible assets and customer relationships. In June 2026, $53.2 million, net, of developed technologies and a nominal amount of customer relationships related to iovera° from the acquisition of MyoScience, Inc. were reclassified to assets held for sale in conjunction with entering into the Purchase Agreement with Zimmer. Amortization on these intangible assets ceased being recorded at the time the assets were classified as held for sale. As such, the amount of amortization of acquired intangible assets will decrease during the second half of 2026, assuming no changes in the gross carrying value of our remaining intangible assets. For more information, see Note 8, Goodwill and Intangible Assets, to our condensed consolidated financial statements included herein.
Current wording
As part of the acquisitions of Flexion Therapeutics, Inc., or Flexion, (in 2021) and MyoScience, Inc. (in 2019), we acquired intangible assets consisting of developed technology intangible assets and customer relationships. In July 2026, $53.2 million, net, of developed technologies and a nominal amount of customer relationships related to iovera° from the acquisition of MyoScience, Inc. were divested. As such, the Divestiture caused a decrease in amortization expense for both the three and nine months ended September 30, 2026. For more information, see Note 8, Goodwill and Intangible Assets, to our condensed consolidated financial statements included herein.
Previous wording
The following table provides a summary of the costs related to the other operating expenses, net during the periods indicated, including percent changes (dollar amounts in thousands):
Current wording
The following table provides a summary of the costs related to the other operating (gains) expenses, net during the periods indicated, including percent changes (dollar amounts in thousands):
Previous wording
During the three and six months ended June 30, 2026, we recognized divestiture-related expenses of $5.9 million, primarily related to third-party services and legal fees associated with divesting iovera°. For more information, see Note 3, Assets and Liabilities Held for Sale, to our condensed consolidated financial statements included herein.
Current wording
During the three and nine months ended September 30, 2026, we recognized expenses related to the Divestiture of $0.7 million and $6.6 million, respectively, primarily related to third-party services and legal fees associated with divesting iovera° to Zimmer. For more information, see Note 3, iovera° Divestiture, to our condensed consolidated financial statements included herein.
Previous wording
During the three months ended June 30, 2026, we recognized contingent consideration charges of $1.7 million due to revisions to the latest discount rates. During the six months ended June 30, 2026, we recognized contingent consideration gains of $0.6 million due to a reduction in our sales forecast through the milestone expiration date of December 31, 2030, partially offset by revisions to the latest discount rates. During the three and six months ended June 30, 2025, we recognized contingent consideration gains of $0.4 million and $3.0 million, respectively, primarily due to revisions to the latest discount rates.
Current wording
During the three and nine months ended September 30, 2026, we recognized contingent consideration gains of $14.4 million and $15.0 million, respectively, due to a reduction in our sales forecast through the milestone expiration date of December 31, 2030. During the three months ended September 30, 2025, we recognized contingent consideration charges of $0.6 million due to revisions to discount rates, partially offset by a reduction in the sales forecast through the milestone expiration date of December 31, 2030. During the nine months ended September 30, 2025, we recognized contingent consideration gains of $2.4 million due to revisions to discount rates.
Previous wording
During the three and six months ended June 30, 2025, we recognized acquisition-related expenses of $1.0 million and $2.5 million, respectively, primarily related to third-party services and legal fees associated with the GQ Bio Acquisition.
Current wording
During the nine months ended September 30, 2025, we recognized acquisition-related expenses of $2.2 million primarily related to third-party services and legal fees associated with the GQ Bio Acquisition.
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Current report — wording carried from elsewhere
(1) Exclusive of amortization of acquired intangible assets
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The effective tax rates of (82)% and 0% for the three and six months ended June 30, 2026, respectively, differed from the U.S. statutory rate of 21% primarily due to the reversal of our U.K. operating subsidiary’s valuation allowance, partially offset by costs related to non-deductible executive compensation and non-deductible stock-based compensation.