Exparel Concerns Weigh On Pacira Pharma, Brean Moves To Sidelines

Brean Capital has downgraded Pacira Pharmaceuticals Inc PCRX to Hold from Buy after the FDA said it is evaluating adverse event reports of local anesthetic systemic toxicity (LAST) with company's drug Exparel.

"We are downgrading Pacirato Hold from Buy for what we believe will amount to an increasingly difficult time marketing Exparel, especially in the face of future competition even just from other forms of extended release bupivacaine," analyst Jonathan Aschoff wrote in a note.

Exparel And Outside Competition Concerns

The analyst noted competition from Heron Therapeutics Inc HRTX is expected about two years from now, in addition to the myriad other late-stage companies evaluating post-operative pain drugs.

"We also believe that Exparel's lack of positive controls in its pivotal trials will be a disadvantage once similar drugs become available that have completed more informatively designed pivotal trials," Aschoff highlighted.

Related Link: Pacira Shares Tumble Following BMO's New Underperform Rating

Exparel, a local analgesic, was included in the FDA's first-quarter report of potential signals of serious risks and new safety information identified in adverse event reports. The FDA's AERS website indicates that the FDA is evaluating the need for regulatory action on Exparel due to potential signals of LAST.

On April 4, the FDA informed Pacira that a tracked safety issue (TSI) was created on March 10. The agency classified the TSI as standard, which is the lowest categorization priority. Pacira will provide an analysis of the issue to the FDA by the requested response date of August 4.

However, the analyst said the FDA gave no specific reason for creating the TSI, and Pacira's roughly 2 million Exparel patient safety database exposes no safety signals related to LAST.

Due to the latest developments, Aschoff widened his loss estimate for FY16 to $0.80 from $0.31.

Other Voices, Ratings And Recent Performance

This week, BMO analyst Gary Nachman initiated coverage on shares of Pacira Pharma with an Underperform rating and $36 price target.

Shares of Pacira Pharma fell 11.26 percent Thursday to close at $33.73 before touching a new 52-week low of $31.08. In Friday's pre-market session, the issue was up 1.27 percent at $34.16.