PCRX - Pacira Pharmaceuticals - Company Profile
Pacira Pharmaceuticals, Inc., a specialty pharmaceutical company, develops, manufactures, and commercializes proprietary pharmaceutical products primarily for use in hospitals and ambulatory surgery centers in the United States. The company develops pharmaceutical products based on its proprietary DepoFoam drug delivery technology. Its lead product includes, EXPAREL, a liposome injection of bupivacaine, an amide-type local anesthetic indicated for infiltration into the surgical site to produce postsurgical analgesia. The company also markets DepoCyt(e), a liposomal formulation of the chemotherapeutic agent cytarabine indicated for the intrathecal treatment of lymphomatous meningitis, a life-threatening complication of lymphoma, a cancer of the immune system. Its development pipeline comprises DepoTranexamic Acid, a long-acting local antifibrinolytic agent, which is in Phase II clinical development for the treatment or prevention of excessive blood loss during surgery by preventing the breakdown of a clot; and DepoMeloxicam, a long-acting non-steroidal anti-inflammatory drug, which is in preclinical development for the treatment of acute postsurgical pain. Company description from FinViz.com.
Pacira has one major drug named Exparel, which is used to control pain at the site of major surgeries. This is an injectable non-opioid pain reliever that reduces the amount of opioid medications a patient needs. With more than 20,101 people dying from opioid medications in 2016 there is a tremendous effort underway to reduce the number of opioid prescriptions and usage.
Pacira was off to the races after the drug was approved but was derailed by a FDA warning letter that slowed sales significantly. The warning was subsequently removed and the drug is in full use once again. The company recently received approval for oral surgeries, soft-tissue surgeries and orthopedic patients.
Because of the pothole in the approval process, the company is expected to lose one cent in 2017. However, the rapidly increasing sales are expected to lift earnings to $3.90 per year by 2020, which is only 3 years away. That is a monster improvement in earnings. Revenue is expected to grow by 20% or more per year.
Expected earnings August 3rd.
Pacira does not have LEAPS. I am going to use the Feb options instead and that will give us 7 months of exposure. The option series was just recently added so the open interest is low but it should rise quickly. PCRX is very close to a breakout over its prior 52-week high at $51.70.
Buy Feb $52.50 call, currently $6.10, initial stop loss $45.65.
Sell short Feb $65.00 call, currently $2.30, initial stop loss $45.65.
Net debit $3.80.