Pacira Biosciences: Exparel-Led Growth and Discounted Valuation Support Attractive Risk–Reward and Buy Rating

Douglas Tsao, an analyst from H.C. Wainwright, reiterated the Buy rating on Pacira Pharmaceuticals. The associated price target remains the same with $38.00.

Douglas Tsao has given his Buy rating due to a combination of factors related to Pacira’s core franchise and valuation. He views Exparel’s full-year performance as confirming the central investment thesis that surgeons’ and hospitals’ use of this non-opioid pain drug is continuing to expand, supported by favorable clinical data and reimbursement dynamics, even though the latest quarter came in slightly below expectations. The modest but consistent volume-driven growth in Exparel, particularly in the second half of the year, reinforces his confidence that the product can remain a durable revenue engine. He also notes that the company’s share repurchase activity reflects management’s confidence in the intrinsic value of the business and provides additional support to the stock.

Tsao’s $38 price target is derived from a discounted cash flow analysis that incorporates risk-adjusted contributions from both marketed and pipeline assets. Exparel is given full commercial credit in his model, while earlier-stage candidate PCRX-201 is assigned a partial probability of success in line with its clinical stage and available data. Although he acknowledges a number of risks—including potential generic and non-opioid competitors, possible changes in reimbursement policy, the challenge of sustaining growth for a mature product, and execution risk in diversifying beyond Exparel—he judges that these are more than compensated by the current valuation and growth outlook. In his view, the risk–reward profile remains attractive, supporting a Buy recommendation on Pacira shares.

In another report released yesterday, Needham also maintained a Buy rating on the stock with a $30.00 price target.