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On Thursday, Truist Securities upgraded Pacira Pharmaceuticals (NASDAQ:PCRX) stock rating from Hold to Buy, significantly raising the price target to $25.00 from the previous $8.00. The stock, currently trading at $26.03, has shown strong momentum with a 33% gain over the past six months. The upgrade follows a meeting with the company’s management and investors, which led Truist analysts to gain confidence in the defensibility of Exparel’s new patent family. According to InvestingPro, four analysts have recently revised their earnings estimates upward for the upcoming period.
The analyst cited a more positive outlook on the potential for Pacira’s management to reach a settlement with eVenus, thus resolving ongoing litigation. The anticipated agreement is expected to include an exclusivity period of approximately eight years, extending to the new loss of exclusivity (LOE) date in 2044. Consequently, Truist now models a generic entry for Exparel around the year 2036, a significant delay from the previously expected 2025. The company maintains a healthy financial position with a current ratio of 2.25, indicating strong liquidity to meet near-term obligations.
Despite the upgrade, Truist noted mixed feedback from key opinion leaders (KOLs) at Weill Cornell, particularly an anesthesiologist who provided commentary on the value proposition of Exparel. This perspective, combined with the market’s diminishing expectations for generic competition—which are already reflected in Pacira’s stock price—led to a cautious stance, resulting in a Hold rating for PCRX shares.
The new price target of $25 reflects Truist’s revised expectations for the pharmaceutical company, taking into account the extended period before generic competitors can enter the market for Exparel. This change in price target represents a more than threefold increase from the previous target, indicating a significant shift in the firm’s valuation of Pacira Pharmaceuticals.
In other recent news, Pacira Pharmaceuticals has been the subject of recent analyst focus. Needham upgraded the price target for Pacira from $22.00 to $30.00, maintaining a buy rating on the stock, following the company’s announcement of its five-year strategic objectives and better-than-expected preliminary revenue for the fourth quarter of 2024. On the other hand, Raymond (NSE:RYMD) James reiterated a Market Perform rating, acknowledging the company’s solid performance and ambitious five-year plan, while also noting uncertainties regarding potential generic competition for Pacira’s product Exparel.
Pacira reported a significant increase in fourth-quarter revenue, reaching $187.3 million, surpassing both Raymond James’ and consensus estimates. The company’s revenue growth trajectory continues, with a 4.4% increase over the last year. The pharmaceutical company also introduced a growth-oriented strategy called "5x30", aiming to achieve various financial objectives, including a double-digit revenue compound annual growth rate (CAGR) and a 5% gross margin improvement.
The company also announced significant advancements in non-opioid pain therapies, including FDA clearance for a new back pain treatment and promising results from an osteoarthritis gene therapy trial. Pacira’s CEO, Frank D. Lee, expressed optimism about advancing the clinical investigation of PCRX-201, the gene therapy candidate.
Finally, Pacira reported new clinical data showing its gene therapy candidate, PCRX-201, provided sustained improvements in knee pain, stiffness, and function for up to 104 weeks in patients with moderate to severe osteoarthritis of the knee. The results stem from a phase 1 trial involving 72 patients, indicating that a single local injection of PCRX-201 could offer durable pain relief. A phase 2 study is planned for 2025.
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