10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from     to

Commission File Number: 001-35060

PACIRA BIOSCIENCES, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	51-0619477
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer  Identification No.)

5401 West Kennedy Boulevard, Suite 890

Tampa, Florida 33609

(Address and Zip Code of Principal Executive Offices)

(813) 553-6680

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, par value $0.001 per share	PCRX	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes  ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.) ☒ Yes  ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes  ☒ No

As of November 1, 2023, 46,437,704 shares of the registrant’s common stock, $0.001 par value per share, were outstanding.

PACIRA BIOSCIENCES, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2023

TABLE OF CONTENTS

		Page #
PART I. FINANCIAL INFORMATION		4
Item 1.	Financial Statements (Unaudited)	4
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations	5
	Condensed Consolidated Statements of Comprehensive Income (Loss)	6
	Condensed Consolidated Statements of Stockholders’ Equity	7
	Condensed Consolidated Statements of Cash Flows	9
	Notes to Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	47
Item 4.	Controls and Procedures	48
PART II. OTHER INFORMATION		49
Item 1.	Legal Proceedings	49
Item 1A.	Risk Factors	49
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities	49
Item 3.	Defaults Upon Senior Securities	49
Item 4.	Mine Safety Disclosures	49
Item 5.	Other Information	50
Item 6.	Exhibits	50
Signatures		52

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 3

PART I — FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS (Unaudited)

PACIRA BIOSCIENCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(Unaudited)

	September 30, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	99,119	$	104,139
Short-term available-for-sale investments	136,069		184,512
Accounts receivable, net	96,956		98,397
Inventories, net	96,520		96,063
Prepaid expenses and other current assets	18,591		15,223
Total current assets	447,255		498,334
Noncurrent available-for-sale investments	—		37,209
Fixed assets, net	175,783		183,512
Right-of-use assets, net	63,394		70,877
Goodwill	163,243		163,243
Intangible assets, net	497,580		540,546
Deferred tax assets	151,660		160,309
Investments and other assets	35,547		27,170
Total assets	$	1,534,462	$	1,681,200
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	16,511	$	15,220
Accrued expenses	59,884		89,785
Lease liabilities	8,625		9,121
Current portion of convertible senior notes, net	8,641		—
Current portion of long-term debt, net	—		33,648
Total current liabilities	93,661		147,774
Convertible senior notes, net	397,976		404,767
Long-term debt, net	117,965		251,056
Lease liabilities	57,089		64,802
Contingent consideration	24,275		28,122
Other liabilities	11,945		9,669
Total liabilities	702,911		906,190
Commitments and contingencies (Note 15)
Stockholders’ equity:
Preferred stock, par value $0.001; 5,000,000 shares authorized; none issued and outstanding at September 30, 2023 and December 31, 2022	—		—
Common stock, par value $0.001; 250,000,000 shares authorized; 46,426,836 and 45,927,790 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively	46		46
Additional paid-in capital	963,181		924,095
Accumulated deficit	(131,666)		(148,751)
Accumulated other comprehensive loss	(10)		(380)
Total stockholders’ equity	831,551		775,010
Total liabilities and stockholders’ equity	$	1,534,462	$	1,681,200

See accompanying notes to condensed consolidated financial statements.

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 4

PACIRA BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenues:
Net product sales	$	163,583	$	166,560	$	492,481	$	492,563
Royalty revenue	343		906		1,253		2,305
Total revenues	163,926		167,466		493,734		494,868
Operating expenses:
Cost of goods sold	39,750		50,678		136,977		137,379
Research and development	20,830		19,405		56,794		67,292
Selling, general and administrative	67,947		61,283		203,640		190,546
Amortization of acquired intangible assets	14,322		14,322		42,966		42,966
Contingent consideration charges (gains), restructuring charges and other	3,356		489		(1,150)		(13,232)
Total operating expenses	146,205		146,177		439,227		424,951
Income from operations	17,721		21,289		54,507		69,917
Other (expense) income:
Interest income	2,766		1,234		8,019		1,757
Interest expense	(3,464)		(9,856)		(16,918)		(28,935)
Loss on early extinguishment of debt	—		—		(16,926)		—
Other, net	(422)		(10,598)		(701)		(11,369)
Total other expense, net	(1,120)		(19,220)		(26,526)		(38,547)
Income before income taxes	16,601		2,069		27,981		31,370
Income tax expense	(5,743)		(2,762)		(10,896)		(5,359)
Net income (loss)	$	10,858	$	(693)	$	17,085	$	26,011
Net income (loss) per share:
Basic net income (loss) per common share	$	0.23	$	(0.02)	$	0.37	$	0.57
Diluted net income (loss) per common share	$	0.23	$	(0.02)	$	0.37	$	0.56
Weighted average common shares outstanding:
Basic	46,416		45,831		46,151		45,400
Diluted	52,067		45,831		46,343		52,220

See accompanying notes to condensed consolidated financial statements.

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 5

PACIRA BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net income (loss)	$	10,858	$	(693)	$	17,085	$	26,011
Other comprehensive income (loss):
Net unrealized gain (loss) on investments, net of tax	146		(163)		362		(1,056)
Foreign currency translation adjustments	17		98		8		219
Total other comprehensive income (loss)	163		(65)		370		(837)
Comprehensive income (loss)	$	11,021	$	(758)	$	17,455	$	25,174

See accompanying notes to condensed consolidated financial statements.

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 6

PACIRA BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(In thousands)

(Unaudited)

	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss
	Shares	Amount								Total
Balance at June 30, 2023	46,409	$	46	$	950,626	$	(142,524)	$	(173)	$	807,975
Exercise of stock options	1	—		25		—		—		25
Vested restricted stock units	17	—		—		—		—		—
Stock-based compensation	—	—		12,530		—		—		12,530
Other comprehensive income (Note 10)	—	—		—		—		163		163
Net income	—	—		—		10,858		—		10,858
Balance at September 30, 2023	46,427	$	46	$	963,181	$	(131,666)	$	(10)	$	831,551

	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss
	Shares	Amount								Total
Balance at June 30, 2022	45,802	$	46	$	895,151	$	(137,956)	$	(605)	$	756,636
Exercise of stock options	37	—		1,563		—		—		1,563
Vested restricted stock units	25	—		—		—		—		—
Stock-based compensation	—	—		12,682		—		—		12,682
Other comprehensive loss (Note 10)	—	—		—		—		(65)		(65)
Net loss	—	—		—		(693)		—		(693)
Balance at September 30, 2022	45,864	$	46	$	909,396	$	(138,649)	$	(670)	$	770,123

See accompanying notes to condensed consolidated financial statements.

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 7

PACIRA BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(In thousands)

(Unaudited)

	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss
	Shares	Amount								Total
Balance at December 31, 2022	45,928	$	46	$	924,095	$	(148,751)	$	(380)	$	775,010
Exercise of stock options	63	—		1,939		—		—		1,939
Vested restricted stock units	386	—		—		—		—		—
Common stock issued under employee stock purchase plan	50	—		1,672		—		—		1,672
Stock-based compensation	—	—		35,475		—		—		35,475
Other comprehensive income (Note 10)	—	—		—		—		370		370
Net income	—	—		—		17,085		—		17,085
Balance at September 30, 2023	46,427	$	46	$	963,181	$	(131,666)	$	(10)	$	831,551

	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive (Loss) Income
	Shares	Amount								Total
Balance at December 31, 2021	44,734	$	45	$	942,091	$	(211,895)	$	167	$	730,408
Reclassification of the equity component of convertible senior notes to liabilities upon adoption of Accounting Standards Update 2020-06 (1)	—	—		(96,468)		47,235		—		(49,233)
Exercise of stock options	667	1		23,497		—		—		23,498
Vested restricted stock units	324	—		—		—		—		—
Common stock issued under employee stock purchase plan	37	—		1,821		—		—		1,821
Stock-based compensation	—	—		35,415		—		—		35,415
Issuance of common stock upon conversion of 2022 convertible senior notes	102	—		3,040		—		—		3,040
Other comprehensive loss (Note 10)	—	—		—		—		(837)		(837)
Net income	—	—		—		26,011		—		26,011
Balance at September 30, 2022	45,864	$	46	$	909,396	$	(138,649)	$	(670)	$	770,123

(1) Effective January 1, 2022, the Company adopted Accounting Standards Update 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) on a modified retrospective method of transition. As a result, the Company no longer separately presents in equity an embedded conversion feature for its convertible debt.

See accompanying notes to condensed consolidated financial statements.

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 8

PACIRA BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (In thousands)

(Unaudited)

	Nine Months Ended September 30,
	2023		2022
Operating activities:
Net income	$	17,085	$	26,011
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred taxes	9,014		2,895
Depreciation of fixed assets and amortization of intangible assets	57,089		61,095
Amortization of debt issuance costs	2,311		2,957
Amortization of debt discount	728		2,107
Loss on early extinguishment of debt	16,926		—
Stock-based compensation	35,475		35,415
Changes in contingent consideration	(3,847)		(23,394)
Impairment of investment	—		10,000
Other losses	2,415		377
Changes in operating assets and liabilities:
Accounts receivable, net	1,440		2,847
Inventories, net	(457)		1,751
Prepaid expenses and other assets	(6,986)		(568)
Accounts payable	1,988		4,681
Accrued expenses and income taxes payable	(26,156)		(23,560)
Other liabilities	40		623
Net cash provided by operating activities	107,065		103,237
Investing activities:
Purchases of fixed assets	(13,363)		(24,584)
Purchases of available-for-sale investments	(111,682)		(319,426)
Sales of available-for-sale investments	200,970		152,636
Payment of contingent consideration	—		(32,000)
Purchases of equity and debt investments	(6,758)		(13,000)
Net cash provided by (used in) investing activities	69,167		(236,374)
Financing activities:
Proceeds from exercises of stock options	1,939		23,482
Proceeds from shares issued under employee stock purchase plan	1,672		1,820
Proceeds from Term loan A facility	149,550		—
Repayment of 2022 convertible senior notes	—		(156,960)
Repayment of 2024 convertible senior notes	—		(192,609)
Repayment of Term loan B facility	(296,875)		(18,750)
Repayment of Term loan A facility	(30,625)		—
Debt extinguishment costs	(5,750)		—
Payment of debt issuance and financing costs	(1,163)		—
Net cash used in financing activities	(181,252)		(343,017)
Net decrease in cash and cash equivalents	(5,020)		(476,154)
Cash and cash equivalents, beginning of period	104,139		585,578
Cash and cash equivalents, end of period	$	99,119	$	109,424
Supplemental cash flow information:
Cash paid for interest	$	24,931	$	23,620
Cash paid for income taxes, net of refunds	$	2,072	$	4,216
Non-cash investing and financing activities:
Issuance of common stock from conversion of 2022 convertible senior notes	$	—	$	3,040
Fixed assets included in accounts payable and accrued liabilities	$	1,470	$	5,486

See accompanying notes to condensed consolidated financial statements.

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 9

PACIRA BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1—DESCRIPTION OF BUSINESS

Pacira BioSciences, Inc. and its subsidiaries (collectively, the “Company” or “Pacira”) is the industry leader in its commitment to non-opioid pain management and providing non-opioid pain management options to as many patients as possible to redefine the role of opioids as rescue therapy only. The Company is also developing innovative interventions to address debilitating conditions involving the sympathetic nervous system, such as cardiac electrical storm, chronic pain and spasticity. The Company’s long-acting, local analgesic, EXPAREL® (bupivacaine liposome injectable suspension), was commercially launched in the United States, or U.S., in April 2012 and approved in select European countries and the United Kingdom, or U.K., in November 2021. EXPAREL utilizes the Company’s proprietary multivesicular liposome (pMVL) drug delivery technology that encapsulates drugs without altering their molecular structure, and releases them over a desired period of time. In November 2021, the Company acquired Flexion Therapeutics, Inc., or Flexion (the “Flexion Acquisition”), and added ZILRETTA® (triamcinolone acetonide extended-release injectable suspension) to its product portfolio. ZILRETTA is the first and only extended-release, intra-articular (meaning in the joint) injection indicated for the management of osteoarthritis, or OA, knee pain. In April 2019, the Company added iovera°® to its commercial offering with the acquisition of MyoScience, Inc., or MyoScience (the “MyoScience Acquisition”). The iovera° system is a handheld cryoanalgesia device used to deliver a precise, controlled application of cold temperature to targeted nerves.

Pacira is subject to risks common to companies in similar industries and stages, including, but not limited to, competition from larger companies, reliance on revenue from three products, reliance on a limited number of wholesalers, reliance on a limited number of manufacturing sites, new technological innovations, dependence on key personnel, reliance on third-party service providers and sole source suppliers, protection of proprietary technology, compliance with government regulations and risks related to cybersecurity.

The Company is managed and operated as a single business focused on the development, manufacture, marketing, distribution and sale of non-opioid pain management and regenerative health solutions. The Company is managed by a single management team, and, consistent with its organizational structure, the Chief Executive Officer—who is the Company’s chief operating decision maker—manages and allocates resources at a consolidated level. Accordingly, the Company views its business as one reportable operating segment to evaluate its performance, allocate resources, set operational targets and forecast its future financial results.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

These interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”), for interim reporting. Pursuant to these rules and regulations, certain information and footnote disclosures normally included in complete annual financial statements have been condensed or omitted. Therefore, these interim condensed consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report”).

The condensed consolidated financial statements at September 30, 2023, and for the three and nine-month periods ended September 30, 2023 and 2022, are unaudited, but include all adjustments (consisting of only normal recurring adjustments) which, in the opinion of management, are necessary to present fairly the financial information set forth herein in accordance with GAAP. The condensed consolidated balance sheet at December 31, 2022 is derived from the audited consolidated financial statements included in the Company’s 2022 Annual Report. The condensed consolidated financial statements as presented reflect certain reclassifications from previously issued financial statements to conform to the current year presentation. The accounts of wholly-owned subsidiaries are included in the condensed consolidated financial statements. Intercompany accounts and transactions have been eliminated in consolidation.

The results of operations for these interim periods are not necessarily indicative of results that may be expected for any other interim periods or for the full year.

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 10

Concentration of Major Customers

    The Company sells EXPAREL through a drop-ship program under which orders are processed through wholesalers (including AmerisourceBergen Health Corporation, Cardinal Health, Inc. and McKesson Drug Company), but shipments of the product are sent directly to individual accounts, such as hospitals, ambulatory surgery centers and individual doctors. The Company also sells EXPAREL directly to ambulatory surgery centers and physicians. The Company sells ZILRETTA primarily to specialty distributors and specialty pharmacies, who then subsequently resell ZILRETTA to physicians, clinics and certain medical centers or hospitals. The Company also contracts directly with healthcare providers and intermediaries such as Group Purchasing Organizations, or GPOs. The Company sells its bupivacaine liposome injectable suspension for veterinary use to a third-party licensee in the U.S. and sells iovera° directly to end users.

The table below includes the percentage of revenues comprised by the Company’s three largest wholesalers in each period presented:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022
Largest wholesaler	33%	31%	33%	31%
Second largest wholesaler	24%	22%	24%	23%
Third largest wholesaler	19%	22%	20%	22%
Total	76%	75%	77%	76%

NOTE 3—REVENUE

Revenue from Contracts with Customers

The Company’s net product sales consist of (i) EXPAREL in the U.S., the European Union, or E.U., and the U.K.; (ii) ZILRETTA in the U.S.; (iii) iovera° in the U.S., Canada and the E.U. and (iv) sales of its bupivacaine liposome injectable suspension for veterinary use. Royalty revenues are related to a collaborative licensing agreement from the sale of its bupivacaine liposome injectable suspension for veterinary use. The Company does not consider revenue from sources other than sales of EXPAREL and ZILRETTA to be material sources of its consolidated revenue. As such, the following disclosure is limited to revenue associated with net product sales of EXPAREL and ZILRETTA.

Net Product Sales

The Company sells EXPAREL through a drop-ship program under which orders are processed through wholesalers based on orders of the product placed by end-users, namely hospitals, ambulatory surgery centers and healthcare provider offices. EXPAREL is delivered directly to the end-user without the wholesaler ever taking physical possession of the product. The Company primarily sells ZILRETTA to specialty distributors and specialty pharmacies, who then subsequently resell ZILRETTA to physicians, clinics and certain medical centers or hospitals. The Company also contracts directly with healthcare providers and intermediaries such as GPOs. Product revenue is recognized when control of the promised goods are transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring those goods. EXPAREL and ZILRETTA revenues are recorded at the time the products are transferred to the customer.

Revenues from sales of products are recorded net of returns allowances, prompt payment discounts, service fees, government rebates, volume rebates and chargebacks. These reserves are based on estimates of the amounts earned or to be claimed on the related sales. These amounts are treated as variable consideration, estimated and recognized as a reduction of the transaction price at the time of the sale, using the most likely amount method, except for returns, which is based on the expected value method. The Company includes these estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized for such transaction will not occur, or when the uncertainty associated with the variable consideration is resolved.

Chargebacks for fees and discounts to qualified government healthcare providers represent the estimated obligations resulting from contractual commitments to sell products to qualified Department of Veteran Affairs hospitals and 340B entities at prices lower than the list prices charged to other customers. The 340B Drug Discount Program is a U.S. federal government program that requires participating drug manufacturers to provide outpatient drugs to eligible health care organizations and covered entities at reduced prices. Customers charge the Company for the difference between the product payment and the statutory selling price to the qualified entity. Reserves are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and trade receivables, net. Chargeback amounts are generally determined at the time of sale to the qualified government healthcare provider by customers, and the Company generally issues credits for such

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 11

amounts within weeks of the customer’s notification to the Company of the sale. Reserves for chargebacks consist of credits that the Company expects to issue for units that the Company expects will be sold to qualified healthcare providers, and chargebacks that customers have claimed, but for which the Company has not yet issued a credit.

The calculation for some of these items requires management to make estimates based on sales data, historical return data, contracts, statutory requirements and other related information that may become known in the future. The adequacy of these provisions is reviewed on a quarterly basis.

Accounts Receivable

The majority of accounts receivable arise from product sales and represent amounts due from wholesalers, hospitals, ambulatory surgery centers, specialty distributors, specialty pharmacies and individual physicians. Payment terms generally range from zero to four months from the date of the transaction, and accordingly, there is no significant financing component.

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in Accounting Standards Codification, or ASC, 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

At contract inception, the Company assesses the goods promised in its contracts with customers and identifies a performance obligation for each promise to transfer to the customer a good that is distinct. When identifying individual performance obligations, the Company considers all goods promised in the contract regardless of whether explicitly stated in the customer contract or implied by customary business practices. The Company’s contracts with customers require it to transfer an individual distinct product, which represents a single performance obligation. The Company’s performance obligation with respect to its product sales is satisfied at a point in time, which transfers control upon delivery of EXPAREL and ZILRETTA to its customers. The Company considers control to have transferred upon delivery because the customer has legal title to the asset, physical possession of the asset has been transferred, the customer has significant risks and rewards of ownership of the asset and the Company has a present right to payment at that time.

Disaggregated Revenue

The following table represents disaggregated net product sales in the periods presented as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net product sales:
EXPAREL	$	128,667	$	132,642	$	394,202	$	398,854
ZILRETTA	28,798		26,494		82,393		77,546
iovera°	5,260		4,467		13,645		10,694
Bupivacaine liposome injectable suspension	858		2,957		2,241		5,469
Total net product sales	$	163,583	$	166,560	$	492,481	$	492,563

NOTE 4—INVENTORIES

The components of inventories, net are as follows (in thousands):

	September 30,		December 31,
	2023		2022
Raw materials	$	49,196	$	39,810
Work-in-process	23,765		28,853
Finished goods	23,559		27,400
Total	$	96,520	$	96,063

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 12

NOTE 5—FIXED ASSETS

Fixed assets, net, summarized by major category, consist of the following (in thousands):

	September 30,		December 31,
	2023		2022
Machinery and equipment	$	120,481	$	118,684
Leasehold improvements	61,508		61,302
Computer equipment and software	16,242		15,360
Office furniture and equipment	2,543		2,420
Construction in progress	106,383		103,226
Total	307,157		300,992
Less: accumulated depreciation	(131,374)		(117,480)
Fixed assets, net	$	175,783	$	183,512

For the three months ended September 30, 2023 and 2022, depreciation expense was $4.1 million and $5.8 million, respectively. For the three months ended September 30, 2023 and 2022, there was $0.7 million and $1.1 million of capitalized interest on the construction of manufacturing sites, respectively.

For the nine months ended September 30, 2023 and 2022, depreciation expense was $14.1 million and $18.0 million, respectively. For the nine months ended September 30, 2023 and 2022, there was $2.8 million and $2.9 million of capitalized interest on the construction of manufacturing sites, respectively.

At September 30, 2023 and December 31, 2022, total fixed assets, net includes manufacturing process equipment and leasehold improvements located in Europe in the amount of $38.3 million and $44.7 million, respectively.

As of September 30, 2023 and December 31, 2022, the Company had asset retirement obligations of $4.0 million and $3.3 million, respectively, included in accrued expenses and other liabilities on its condensed consolidated balance sheets, for costs associated with returning leased spaces to their original condition upon the termination of certain of its lease agreements.

NOTE 6—LEASES

The Company leases all of its facilities, including its EXPAREL and iovera° handpiece manufacturing facility at its Science Center Campus in San Diego, California. The Company also has two embedded leases with Thermo Fisher Scientific Pharma Services for the use of their manufacturing facility in Swindon, England for the production of EXPAREL and ZILRETTA. A portion of the associated monthly base fees has been allocated to the lease components based on a relative fair value basis.

Since July 2022 and February 2023, the Company has been recognizing sublease income for laboratory space leased in Woburn, Massachusetts and a portion of office space leased in Burlington, Massachusetts, respectively, from leases that were assumed as part of the Flexion Acquisition.

During the third quarter of 2023, the Company partially exited its Burlington, Massachusetts office space lease that had been assumed as part of the Flexion Acquisition through a one-time termination fee of $0.8 million, which released its obligation of $1.6 million in future cash payments for the respective proportion of square footage exited. The partial lease termination resulted in a nominal gain which was recorded within contingent consideration charges (gains), restructuring charges and other in the condensed consolidated statements of operations.

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 13

The operating lease costs for the facilities include lease and non-lease components, such as common area maintenance and other common operating expenses, along with executory costs such as insurance and real estate taxes. Total operating lease expense, net is as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Fixed lease costs	$	3,559	$	3,440	$	10,818	$	10,509
Variable lease costs	499		540		1,444		1,520
Sublease income	(167)		(169)		(489)		(169)
Total	$	3,891	$	3,811	$	11,773	$	11,860

Supplemental cash flow information related to operating leases is as follows (in thousands):

	Nine Months Ended
	September 30,
	2023		2022
Cash paid for operating lease liabilities, net of lease incentives	$	11,055	$	9,922

The Company has elected to net the amortization of the right-of-use asset and the reduction of the lease liability principal in other liabilities in the condensed consolidated statements of cash flows.

The Company has measured its operating lease liabilities at an estimated discount rate at which it could borrow on a collateralized basis over the remaining term for each operating lease. The weighted average remaining lease terms and the weighted average discount rates are summarized as follows:

	September 30,
	2023		2022
Weighted average remaining lease term	6.26 years		7.11 years
Weighted average discount rate	7.03	%	6.95	%

Maturities of the Company’s operating lease liabilities are as follows (in thousands):

Year	Aggregate Minimum Payments Due
2023 (remaining three months)	$	3,249
2024	13,038
2025	12,775
2026	12,814
2027	12,587
Thereafter	27,351
Total future lease payments	81,814
Less: imputed interest	(16,100)
Total operating lease liabilities	$	65,714

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 14

NOTE 7—GOODWILL AND INTANGIBLE ASSETS

Goodwill

The Company’s goodwill results from the acquisition of Pacira Pharmaceuticals, Inc. (the Company’s California operating subsidiary) from SkyePharma Holding, Inc., or Skyepharma, (now a subsidiary of Vectura Group plc) in 2007 (the “Skyepharma Acquisition”), the MyoScience Acquisition in 2019 and the Flexion Acquisition in 2021. The balance at each of September 30, 2023 and December 31, 2022 was $163.2 million.

The Skyepharma Acquisition occurred in March 2007, prior to the requirements to record contingent consideration at fair value under ASC 805-30. In connection with the Skyepharma Acquisition, the Company agreed to certain milestone payments for DepoBupivacaine products, including EXPAREL. The final Skyepharma milestone payment of $32.0 million when annual net sales collected reached $500.0 million was achieved in the fourth quarter of 2021 and paid during the first quarter of 2022.

Intangible Assets

Intangible assets, net, consists of the in-process research and development, or IPR&D, and developed technology from the Flexion Acquisition and developed technology and customer relationships from the MyoScience Acquisition and are summarized as follows (dollar amounts in thousands):

September 30, 2023	Gross Carrying Value		Accumulated Amortization		Intangible Assets, Net		Weighted-Average Useful Lives
Developed technologies	$	590,000	$	(127,336)	$	462,664	10 years, 5 months
Customer relationships	90		(40)		50		10 years
Total finite-lived intangible assets, net	590,090		(127,376)		462,714
Acquired IPR&D	34,866		—		34,866
Total intangible assets, net	$	624,956	$	(127,376)	$	497,580
December 31, 2022	Gross Carrying Value		Accumulated Amortization		Intangible Assets, Net		Weighted-Average Useful Lives
Developed technologies	$	590,000	$	(84,376)	$	505,624	10 years, 5 months
Customer relationships	90		(34)		56		10 years
Total finite-lived intangible assets, net	590,090		(84,410)		505,680
Acquired IPR&D	34,866		—		34,866
Total intangible assets, net	$	624,956	$	(84,410)	$	540,546

Amortization expense on intangible assets was $14.3 million for both the three months ended September 30, 2023 and 2022 and $43.0 million for both the nine months ended September 30, 2023 and 2022.

Assuming no changes in the gross carrying amount of these intangible assets, the future estimated amortization expense on the finite-lived intangible assets will be $14.3 million for the remaining three months of 2023, $57.3 million each year from 2024 to 2030, $37.4 million in 2031, $7.9 million in 2032 and $2.2 million in 2033.

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 15

NOTE 8—DEBT

The carrying value of the Company’s outstanding debt is summarized as follows (in thousands):

	September 30,		December 31,
	2023		2022
Term loan A facility maturing March 2028	$	117,965	$	—
Term loan B facility maturing December 2026 (1)	—		284,704
0.750% Convertible senior notes due August 2025	397,976		396,126
3.375% Convertible senior notes due May 2024	8,641		8,641
Total	$	524,582	$	689,471

(1) The TLB Term Loan (as defined below) was refinanced on March 31, 2023 as discussed below.

2028 Term Loan A Facility

On March 31, 2023, the Company entered into a credit agreement (the “TLA Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent, and certain lenders, to refinance the indebtedness outstanding under the Company’s TLB Credit Agreement (as defined and discussed below). The term loan issued under the TLA Credit Agreement (the “TLA Term Loan”) was issued at a 0.30% discount and provides for a single-advance term loan A facility in the principal amount of $150.0 million, which is secured by substantially all of the Company’s and any subsidiary guarantor’s assets. Subject to certain conditions, the Company may, at any time, on one or more occasion, add one or more new classes of term facilities and/or increase the principal amount of the loans of any existing class by requesting one or more incremental term facilities. The net proceeds of the TLA Term Loan were approximately $149.6 million after deducting an original issue discount of $0.4 million.

The total debt composition of the TLA Term Loan is as follows (in thousands):

	September 30,
	2023
Term loan A facility maturing March 2028	$	119,375
Deferred financing costs	(1,013)
Discount on debt	(397)
Total debt, net of debt discount and deferred financing costs	$	117,965

The TLA Term Loan matures on March 31, 2028 and the TLA Credit Agreement requires quarterly repayments of principal in the amount of $2.8 million which commenced on June 30, 2023, increasing to $3.8 million commencing March 31, 2025, with a remaining balloon payment of approximately $85.3 million due at maturity. Due to voluntary principal prepayments of $27.8 million made during the three months ended September 30, 2023, the Company is not required to make further principal payments for the remainder of 2023 and 2024.

The TLA Credit Agreement requires the Company to, among other things, maintain (i) a Senior Secured Net Leverage Ratio (as defined in the TLA Credit Agreement), determined as of the last day of each fiscal quarter, of no greater than 3.00 to 1.00 and (ii) a Fixed Charge Coverage Ratio (as defined in the Credit Agreement), determined as of the last day of each fiscal quarter, of no less than 1.50 to 1.00. The TLA Credit Agreement also contains customary affirmative and negative covenants, financial covenants, representations and warranties, events of default and other provisions. As of September 30, 2023, the Company was in compliance with all financial covenants under the TLA Credit Agreement.

The Company may elect to borrow either (i) alternate base rate borrowings or (ii) term benchmark borrowings or daily simple SOFR (as defined in the TLA Credit Agreement) borrowings. Each term loan borrowing that is an alternate base rate borrowing bears interest at a rate per annum equal to (i) the Alternate Base Rate (as defined in the TLA Credit Agreement), plus (ii) a spread based on the Company’s Senior Secured Net Leverage Ratio ranging from 2.00% to 2.75%. Each term loan borrowing that is a term benchmark borrowing or daily simple SOFR borrowing bears interest at a rate per annum equal to (i) the Adjusted Term SOFR Rate or Adjusted Daily Simple SOFR (as each is defined in the Credit Agreement), plus (ii) a spread based on the Company’s Senior Secured Net Leverage Ratio ranging from 3.00% to 3.75%. During the nine months ended September 30, 2023, the Company made a scheduled principal payment of $2.8 million as well as $27.8 million of voluntary principal prepayments. As of September 30, 2023, borrowings under the TLA Term Loan consisted entirely of term benchmark borrowings at a rate of 8.47%.

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 16

2026 Term Loan B Facility

In December 2021, the Company entered into a term loan credit agreement (the “TLB Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent and the initial lender. The term loan issued under the Credit Agreement (the “TLB Term Loan”) was issued at a 3.00% discount and allowed for a single-advance term loan B facility in the principal amount of $375.0 million, which was secured by substantially all of the Company’s and each subsidiary guarantor’s assets. The net proceeds of the TLB Term Loan were approximately $363.8 million after deducting an original issue discount of $11.2 million.

On March 31, 2023, the Company used the $149.6 million of net borrowings under the TLA Credit Agreement and cash on hand to repay the indebtedness outstanding under the TLB Credit Agreement and concurrently terminated the TLB Credit Agreement. The Company incurred a prepayment fee of 2.00% of the outstanding principal balance of the TLB Term Loan in connection with the termination.

The total debt composition of the TLB Term Loan was as follows (in thousands):

	September 30,		December 31,
	2023		2022
Term loan B facility maturing December 2026	$	—	$	296,875
Deferred financing costs	—		(3,919)
Discount on debt	—		(8,252)
Total debt, net of debt discount and deferred financing costs	$	—	$	284,704

During the nine months ended September 30, 2023, the Company made a scheduled principal payment of $9.4 million and repaid the outstanding $287.5 million principal on the TLB Term Loan, which resulted in a $16.9 million loss on early extinguishment of debt.

Convertible Senior Notes Due 2025

In July 2020, the Company completed a private placement of $402.5 million in aggregate principal amount of its 0.750% convertible senior notes due 2025, or 2025 Notes, and entered into an indenture with Computershare Corporate Trust, N.A. (formerly Wells Fargo Bank, N.A.), or 2025 Indenture, with respect to the 2025 Notes. The 2025 Notes accrue interest at a fixed rate of 0.750% per year, payable semiannually in arrears on February 1st and August 1st of each year. The 2025 Notes mature on August 1, 2025.

The total debt composition of the 2025 Notes is as follows (in thousands):

	September 30,		December 31,
	2023		2022
0.750% convertible senior notes due August 2025	$	402,500	$	402,500
Deferred financing costs	(4,524)		(6,374)
Total debt, net of debt discount and deferred financing costs	$	397,976	$	396,126

The net proceeds from the issuance of the 2025 Notes were approximately $390.0 million, after deducting commissions and the offering expenses paid by the Company. A portion of the net proceeds from the 2025 Notes was used by the Company to repurchase $185.0 million in aggregate principal amount of its then-outstanding 2.375% convertible senior notes due 2022 in privately-negotiated transactions for a total of $211.1 million of cash (including accrued interest).

Holders may convert the 2025 Notes at any time prior to the close of business on the business day immediately preceding February 3, 2025, only if certain circumstances are met, including if during the previous calendar quarter, the last reported sales price of the Company’s common stock was greater than 130% of the conversion price then applicable for at least 20 out of the last 30 consecutive trading days of the quarter. During the quarter ended September 30, 2023, the conditions for conversion were not met.

On or after February 3, 2025, until the close of business on the second scheduled trading day immediately preceding August 1, 2025, holders may convert their 2025 Notes at any time.

Upon conversion, holders will receive the principal amount of their 2025 Notes and any excess conversion value, calculated based on the per share volume-weighted average price for each of the 40 consecutive trading days during the observation period (as more fully described in the 2025 Indenture). For both the principal and excess conversion value, holders may receive cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s option. The initial conversion rate for the 2025 Notes is 13.9324 shares of common stock per $1,000

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 17

principal amount, which is equivalent to an initial conversion price of $71.78 per share of the Company’s common stock. The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. The initial conversion price of the 2025 Notes represents a premium of approximately 32.5% to the closing sale price of $54.17 per share of the Company’s common stock on the Nasdaq Global Select Market on July 7, 2020, the date that the Company priced the private offering of the 2025 Notes.

As of September 30, 2023, the 2025 Notes had a market price of $909 per $1,000 principal amount. In the event of conversion, holders would forgo all future interest payments, any unpaid accrued interest and the possibility of further stock price appreciation. Upon the receipt of conversion requests, the settlement of the 2025 Notes will be paid pursuant to the terms of the 2025 Indenture. In the event that all of the 2025 Notes are converted, the Company would be required to repay the $402.5 million in principal value and any conversion premium in any combination of cash and shares of its common stock (at the Company’s option).

Beginning on August 1, 2023 (but, in the case of a redemption of less than all of the outstanding 2025 Notes, no later than the 40th scheduled trading day immediately before the maturity date), the Company may redeem for cash all or part of the 2025 Notes if the last reported sale price (as defined in the 2025 Indenture) of the Company’s common stock has been at least 130% of the conversion price then in effect for (i) each of at least 20 trading days (whether or not consecutive) during any 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related notice of redemption and (ii) the trading day immediately before the date the Company sends such notice. The redemption price will equal the sum of (i) 100% of the principal amount of the 2025 Notes being redeemed, plus (ii) accrued and unpaid interest, including additional interest, if any, to, but excluding, the redemption date. In addition, calling the 2025 Notes for redemption will constitute a “make-whole fundamental change” (as defined in the 2025 Indenture) and will, in certain circumstances, increase the conversion rate applicable to the conversion of such notes if it is converted in connection with the redemption. No sinking fund is provided for the 2025 Notes.

While the 2025 Notes are currently classified on the Company’s condensed consolidated balance sheet at September 30, 2023 as long-term debt, the future convertibility and resulting balance sheet classification of this liability is monitored at each quarterly reporting date and is analyzed dependent upon market prices of the Company’s common stock during the prescribed measurement periods. In the event that the holders of the 2025 Notes have the election to convert the 2025 Notes at any time during the prescribed measurement period, the 2025 Notes would then be considered a current obligation and classified as such.

Convertible Senior Notes Due 2024 Assumed from the Flexion Acquisition

Prior to the Flexion Acquisition, on May 2, 2017, Flexion issued an aggregate of $201.3 million principal amount of 3.375% convertible senior notes due 2024 (the “Flexion 2024 Notes”), pursuant to the indenture, dated as of May 2, 2017 (the “Original Flexion Indenture”), between Flexion and Computershare Corporate Trust, N.A. (formerly Wells Fargo Bank, N.A.), as trustee (the “Flexion Trustee”), as supplemented by the First Supplemental Indenture, dated as of November 19, 2021, between Flexion and the Flexion Trustee (the “First Supplemental Flexion Indenture” and, together with the Original Flexion Indenture, the “Flexion Indenture”). The Flexion 2024 Notes mature on May 1, 2024, are unsecured and accrue interest at a rate of 3.375% per annum, payable semi-annually on May 1st and November 1st of each year. Upon the Flexion Acquisition, the principal was assumed and recorded at fair value by the Company.

As a result of the Flexion Acquisition, and in connection with a Fundamental Change Company Notice and Offer to Purchase (the “Notice”) to the holders of the Flexion 2024 Notes in accordance with the Flexion Indenture, holders of the Flexion 2024 Notes became entitled to certain Flexion Acquisition-related conversion and repurchase rights. On December 6, 2021, as a result of the Flexion Acquisition and in accordance with the Flexion Indenture, the Company offered to repurchase for cash all of the outstanding Flexion 2024 Notes, at a repurchase price in cash equal to 100% of the principal amount of the Flexion 2024 Notes being repurchased, plus accrued and unpaid interest thereon to, but excluding, January 7, 2022, subject to the terms and conditions set forth therein. Any holder that did not exercise its repurchase right in accordance with the terms of the Notice retained the conversion rights associated with such holder’s Flexion 2024 Notes under the Flexion Indenture as well as the right to receive interest payments on the Flexion 2024 Notes.

On January 7, 2022, following the expiration of the offer to purchase, the Company accepted the $192.6 million aggregate principal amount of Flexion 2024 Notes that were validly tendered (and not validly withdrawn). No Flexion 2024 Notes were converted in connection with the Notice. At September 30, 2023, the remaining principal outstanding is $8.6 million.

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 18

Convertible Senior Notes Due 2022

In March 2017, the Company completed a private placement of $345.0 million in aggregate principal amount of 2.375% convertible senior notes due 2022, or 2022 Notes, and entered into an indenture with respect to the 2022 Notes. On April 1, 2022, the 2022 Notes matured and the Company settled the remaining outstanding principal balance of $160.0 million and a conversion premium of $4.8 million through a cash payment of $156.9 million and the issuance of 101,521 shares of the Company’s common stock, which increased additional paid-in capital by $3.0 million.

Interest Expense

The following table sets forth the total interest expense recognized in the periods presented (dollar amounts in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Contractual interest expense	$	3,471		$	9,343		$	16,670		$	26,724
Amortization of debt issuance costs	683			903			2,311			2,956
Amortization of debt discount	25			695			728			2,107
Capitalized interest and other (Note 5)	(715)			(1,085)			(2,791)			(2,852)
Total	$	3,464		$	9,856		$	16,918		$	28,935
Effective interest rate on total debt	2.98		%	5.42		%	3.96		%	5.66		%

NOTE 9—FINANCIAL INSTRUMENTS

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or be paid to transfer a liability in the principal or most advantageous market in an orderly transaction. To increase consistency and comparability in fair value measurements, the Financial Accounting Standards Board (FASB) established a three-level hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of fair value measurements are:

•Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

•Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

•Level 3: Unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

The carrying value of financial instruments including cash and cash equivalents, accounts receivable and accounts payable approximate their respective fair values due to the short-term nature of these items. The fair value of the Company’s convertible senior notes are calculated utilizing market quotations from an over-the-counter trading market for these notes (Level 2). The fair value of the Company’s acquisition-related contingent consideration is reported at fair value on a recurring basis (Level 3). The carrying amounts of equity investments and convertible notes receivable without readily determinable fair values have not been adjusted for either an impairment or upward or downward adjustments based on observable transactions.

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 19

At September 30, 2023, the carrying values and fair values of the following financial assets and liabilities were as follows (in thousands):

	Carrying Value		Fair Value Measurements Using
			Level 1		Level 2		Level 3
Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis:
Financial Assets:
Equity investments	$	15,877	$	—	$	—	$	15,877
Convertible notes receivable	$	11,938	$	—	$	—	$	11,938
Financial Liabilities:
Acquisition-related contingent consideration	$	24,275	$	—	$	—	$	24,275
Financial Liabilities Measured at Amortized Cost:
Term loan A facility due March 2028	$	117,965	$	—	$	118,778	$	—
0.750% convertible senior notes due 2025 (1)	$	397,976	$	—	$	365,772	$	—
3.375% convertible senior notes due 2024	$	8,641	$	—	$	8,641	$	—

(1) The closing price of the Company’s common stock as reported on the Nasdaq Global Select Market was $30.68 per share at September 30, 2023 compared to a conversion price of $71.78 per share. At September 30, 2023, as the conversion price was above the stock price, the requirements for conversion have not been met. The maximum conversion premium that could have been due on the 2025 Notes is 5.6 million shares of the Company’s common stock, which assumes no increase in the conversion rate for certain corporate events.

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

Equity and Convertible Note Investments

The Company holds strategic investments in clinical and preclinical stage privately-held biotechnology companies in the form of equity and convertible note investments. The following investments have no readily determinable fair value and are recorded at cost minus impairment, if any, plus or minus observable price changes of identical or similar investments (in thousands):

	Equity Investments		Convertible Notes Receivable		Total
Balance at December 31, 2021	$	14,127	$	4,132	$	18,259
Purchases	11,750		1,250		13,000
Impairment	(10,000)		—		(10,000)
Foreign currency adjustments	—		(67)		(67)
Balance at December 31, 2022	15,877		5,315		21,192
Purchases	—		6,758		6,758
Foreign currency adjustments	—		(135)		(135)
Balance at September 30, 2023	$	15,877	$	11,938	$	27,815

Acquisition-Related Contingent Consideration

The Company has recognized contingent consideration related to the Flexion Acquisition and the MyoScience Acquisition in the amount of $24.3 million and $28.1 million as of September 30, 2023 and December 31, 2022, respectively. For more information, see Note 14, Contingent Consideration Charges (Gains), Restructuring Charges and Other.

The Company’s contingent consideration obligations are recorded at their estimated fair values and are revalued each reporting period if and until the related contingencies are resolved. The Company has measured the fair value of its contingent consideration using a probability-weighted discounted cash flow approach that is based on unobservable inputs and a Monte Carlo simulation. These inputs include, as applicable, estimated probabilities and the timing of achieving specified commercial and regulatory milestones, estimated forecasts of revenue and costs and the discount rates used to calculate the present value of estimated future payments. Significant changes may increase or decrease the probabilities of achieving the related commercial and regulatory events, shorten or lengthen the time required to achieve such events, or increase or decrease estimated forecasts.

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 20

In November 2021, the Company completed the Flexion Acquisition, which provided for contingent consideration related to contingent value rights that were issued to Flexion shareholders and certain equity award holders which could aggregate up to a total of $372.3 million if certain regulatory and commercial milestones are met. The aggregate amount was initially $425.5 million prior to the Company’s September 2022 decision to formally discontinue further development of Flexion’s product candidate, PCRX-301. The Company’s obligation to make milestone payments is limited to those milestones achieved through December 31, 2030, and are to be paid within 60 days of the end of the fiscal quarter of achievement. During the three months ended September 30, 2023, the Company recorded charges of $2.8 million primarily due to market volatility which affects the liability’s present value. During the nine months ended September 30, 2023, the Company recorded gains of $3.8 million due to adjustments to long-term forecasts which reduced the probability of meeting the sales-based contingent consideration milestones by December 31, 2030, the expiration date for achieving the milestones. The gains recognized during the nine months ended September 30, 2023 were partially offset by a decrease in the assumed discount rate that is utilized in calculating the liability’s present value, based on a significant improvement in the Company’s incremental borrowing rate resulting from the TLA Credit Agreement entered into in March 2023. During the three and nine months ended September 30, 2022, the Company recorded gains of $0.5 million and $13.8 million, respectively, primarily due to adjustments to near-term forecasts for the earnout period of the contingent consideration. These adjustments were recorded as contingent consideration charges (gains), restructuring charges and other in the condensed consolidated statements of operations. At September 30, 2023, the weighted average discount rate was 10.6% and the probability of payment for the achievement of the remaining regulatory milestone by the expiration date was 12.5%. As of September 30, 2023 and December 31, 2022, a contingent consideration liability related to the Flexion Acquisition was recognized in the amount of $24.3 million and $28.1 million, respectively.

In April 2019, the Company completed the MyoScience Acquisition pursuant to the terms of an Agreement and Plan of Merger, which provided for contingent milestone payments of up to an aggregate of $100.0 million upon the achievement of certain regulatory and commercial milestones. The Company’s obligation to make milestone payments is limited to those milestones achieved through December 31, 2023, and are to be paid within 60 days of the end of the fiscal quarter of achievement. As of September 30, 2023, the maximum potential remaining milestone payments to be paid are $43.0 million. At September 30, 2023, the probability of success for the regulatory milestone that has not yet been met was assessed as zero. As of September 30, 2023 and December 31, 2022, a contingent consideration liability related to the MyoScience Acquisition has been assessed as zero. During the three and nine months ended September 30, 2022, the Company recognized contingent consideration gains of $0.5 million and $9.6 million, respectively, due to the reduced probability of meeting the contingent consideration milestones by December 31, 2023, the expiration date for achieving the milestones.

The following table includes the key assumptions used in the valuation of the Company’s contingent consideration:

Assumption	Flexion Ranges Utilized as of September 30, 2023
Discount rates	10.1% to 11.1%
Probabilities of payment for regulatory milestones	0% to 12.5%
Projected year of payment for regulatory and commercial milestones	2030

The change in the Company’s contingent consideration recorded at fair value using Level 3 measurements is as follows (in thousands):

	Contingent Consideration Fair Value
Balance at December 31, 2021	$	57,598
Fair value adjustments and accretion	(29,476)
Balance at December 31, 2022	28,122
Fair value adjustments and accretion	(3,847)
Balance at September 30, 2023	$	24,275

Available-for-Sale Investments

Short-term investments consist of asset-backed securities collateralized by credit card receivables, investment grade commercial paper and corporate, federal agency and government bonds with maturities greater than three months, but less than one year. Noncurrent investments consist of federal agency bonds and government bonds with maturities greater than one year but less than three years. Net unrealized gains and losses (excluding credit losses, if any) from the Company’s short-term investments are reported in other comprehensive income (loss). At September 30, 2023 and December 31, 2022, all of the

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 21

Company’s short-term and noncurrent investments are classified as available-for-sale investments and are determined to be Level 2 instruments, which are measured at fair value using standard industry models with observable inputs. The fair value of the commercial paper is measured based on a standard industry model that uses the three-month U.S. Treasury bill rate as an observable input. The fair value of the asset-backed securities and corporate bonds is principally measured or corroborated by trade data for identical issues in which related trading activity is not sufficiently frequent to be considered a Level 1 input or that of comparable securities. At the time of purchase, all available-for-sale investments had an “A” or better rating by Standard & Poor’s. 

The following summarizes the Company’s short-term and noncurrent available-for-sale investments at September 30, 2023 and December 31, 2022 (in thousands):

September 30, 2023 Investments	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value (Level 2)
Current:
Asset-backed securities	$	15,473	$	—	$	(32)	$	15,441
Commercial paper	65,781		1		(110)		65,672
U.S. federal agency bonds	40,332		—		(116)		40,216
U.S. government bonds	14,797		—		(57)		14,740
Total	$	136,383	$	1	$	(315)	$	136,069

December 31, 2022 Investments	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value (Level 2)
Current:
Asset-backed securities	$	6,836	$	—	$	(3)	$	6,833
Commercial paper	134,423		23		(386)		134,060
U.S. federal agency bonds	41,971		—		(337)		41,634
U.S. government bonds	2,003		—		(18)		1,985
Subtotal	$	185,233	$	23	$	(744)	$	184,512
Noncurrent:
U.S. federal agency bonds	22,783		2		(66)		22,719
U.S. government bonds	14,499		—		(9)		14,490
Subtotal	37,282		2		(75)		37,209
Total	$	222,515	$	25	$	(819)	$	221,721

At September 30, 2023, there were no investments available for sale that were materially less than their amortized cost.

The Company elects to recognize its interest receivable separate from its available-for-sale investments. At September 30, 2023 and December 31, 2022, the interest receivable from its available-for-sale investments recognized in prepaid expenses and other current assets was $0.4 million and $0.8 million, respectively.

Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term and long-term available-for-sale investments and accounts receivable. The Company maintains its cash and cash equivalents with high-credit quality financial institutions. Such amounts may exceed federally-insured limits.

 As of September 30, 2023, three wholesalers each accounted for over 10% of the Company’s accounts receivable, at 37%, 18% and 15%. At December 31, 2022, three wholesalers each accounted for over 10% of the Company’s accounts receivable, at 34%, 19% and 18%. For additional information regarding the Company’s wholesalers, see Note 2, Summary of Significant Accounting Policies. EXPAREL and ZILRETTA revenues are primarily derived from major wholesalers and specialty distributors that generally have significant cash resources. The Company performs ongoing credit evaluations of its customers as warranted and generally does not require collateral. Allowances for credit losses on the Company’s accounts receivable are maintained based on historical payment patterns, current and estimated future economic conditions, aging of accounts receivable and its write-off history. As of September 30, 2023 and December 31, 2022, the Company did not deem any allowances for credit losses on its accounts receivable necessary.

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NOTE 10—STOCKHOLDERS’ EQUITY

Accumulated Other Comprehensive Loss

The following tables illustrate the changes in the balances of the Company’s accumulated other comprehensive loss for the periods presented (in thousands):

	Net Unrealized Gain (Loss) From Available-For-Sale Investments		Unrealized Foreign Currency Translation		Accumulated Other Comprehensive Loss
Balance at December 31, 2022	$	(523)	$	143	$	(380)
Net unrealized gain on investments, net of tax (1)	362		—		362
Foreign currency translation adjustments	—		8		8
Balance at September 30, 2023	$	(161)	$	151	$	(10)

	Net Unrealized (Loss) Gain From Available-For-Sale Investments		Unrealized Foreign Currency Translation		Accumulated Other Comprehensive (Loss) Income
Balance at December 31, 2021	$	139	$	28	$	167
Net unrealized loss on investments, net of tax (1)	(1,056)		—		(1,056)
Foreign currency translation adjustments	—		219		219
Balance at September 30, 2022	$	(917)	$	247	$	(670)

(1) Net of a $0.2 million tax expense and $0.3 million tax benefit for the nine months ended September 30, 2023 and 2022, respectively.

NOTE 11—STOCK PLANS

Stock Incentive Plans

The Company’s Amended and Restated 2011 Stock Incentive Plan, or 2011 Plan, was originally adopted by its board of directors and approved by its stockholders in June 2011 and was amended and restated in June 2014, June 2016, June 2019, June 2021 and June 2023. In June 2023, the Company’s stockholders approved the amendment and restatement which increased the number of shares of common stock authorized for issuance as equity awards under the 2011 Plan by 3,300,000 shares. The 2011 Plan allows the granting of incentive stock options, non-statutory stock options, restricted stock units and other stock-based awards.

Stock-Based Compensation

The Company recognized stock-based compensation expense in the periods presented as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Cost of goods sold	$	1,272	$	1,599	$	4,432	$	4,429
Research and development	2,220		1,783		5,817		4,761
Selling, general and administrative	9,038		9,300		25,226		26,225
Total	$	12,530	$	12,682	$	35,475	$	35,415
Stock-based compensation from:
Stock options	$	5,957	$	6,711	$	18,163	$	20,038
Restricted stock units	6,373		5,758		16,592		14,588
Employee stock purchase plan	200		213		720		789
Total	$	12,530	$	12,682	$	35,475	$	35,415

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 23

Equity Awards

The following tables contain information about the Company’s stock option and restricted stock unit, or RSU, activity for the nine months ended September 30, 2023:

Stock Options	Number of Stock Options	Weighted Average Exercise Price (Per Share)
Outstanding at December 31, 2022	6,272,994	$	52.38
Granted	1,435,143	39.13
Exercised	(62,680)	30.93
Forfeited	(195,249)	53.65
Expired	(339,565)	53.15
Outstanding at September 30, 2023	7,110,643	49.82

Restricted Stock Units	Number of Restricted Stock Units	Weighted Average Grant Date Fair Value (Per Share)
Unvested at December 31, 2022	1,149,462	$	57.26
Granted	774,462	39.20
Vested	(385,732)	55.05
Forfeited	(143,866)	55.39
Unvested at September 30, 2023	1,394,326	48.01

The weighted average fair value of stock options granted during the nine months ended September 30, 2023 was $16.21 per share. The fair values of stock options granted were estimated using the Black-Scholes option valuation model with the following weighted average assumptions:

Black-Scholes Weighted Average Assumption	Nine Months Ended September 30, 2023
Expected dividend yield	None
Risk-free interest rate	4.00%
Expected volatility	41.32%
Expected term of options	4.86 years

Employee Stock Purchase Plan

The Company’s Amended and Restated 2014 Employee Stock Purchase Plan, or ESPP, features two six-month offering periods per year, running from January 1 to June 30 and July 1 to December 31. Under the ESPP, employees may elect to contribute after-tax earnings to purchase shares at 85% of the closing fair market value of the Company’s common stock on either the offering date or the purchase date, whichever is lesser. During the nine months ended September 30, 2023, 50,634 shares were purchased and issued through the ESPP.

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NOTE 12—NET INCOME (LOSS) PER SHARE

Basic net income (loss) per common share is calculated by dividing the net income (loss) attributable to common shares by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share is calculated by dividing the net income (loss) attributable to common shares by the weighted average number of common shares outstanding plus dilutive potential common shares outstanding during the period.

Potential common shares include the shares of common stock issuable upon the exercise of outstanding stock options, the vesting of RSUs and the purchase of shares from the ESPP (using the treasury stock method), if applicable. Potential common shares associated with convertible notes are treated under the if-converted method, adjustments are made to the diluted net income (loss) per common share calculation as if the Company had converted the convertible debt on the first day of each period presented. Adjustments to the numerator are made to add back the interest expense associated with the convertible debt on a post-tax basis. Adjustments to the denominator reflect the number of shares assumed to be convertible at the beginning of the period.

Potential common shares are excluded from the diluted net income (loss) per common share computation to the extent they would be antidilutive.

The following table sets forth the computation of basic and diluted net income (loss) per common share for the three and nine months ended September 30, 2023 and 2022 (in thousands, except per share amounts):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerator:
Net income (loss)—basic	$	10,858	$	(693)	$	17,085	$	26,011
ASU 2020-06 convertible notes if-converted method adjustment	1,029		—		—		3,112
Adjusted net income (loss)—diluted	$	11,887	$	(693)	$	17,085	$	29,123
Denominator:
Weighted average common shares outstanding—basic	46,416		45,831		46,151		45,400
Computation of diluted securities:
ASU 2020-06 convertible notes if-converted method adjustment	5,608		—		—		5,608
Dilutive effect of stock options	20		—		68		937
Dilutive effect of RSUs	23		—		122		272
Dilutive effect of ESPP purchase options	—		—		2		3
Weighted average common shares outstanding—diluted	52,067		45,831		46,343		52,220
Net income per share:
Basic net income (loss) per common share	$	0.23	$	(0.02)	$	0.37	$	0.57
Diluted net income (loss) per common share	$	0.23	$	(0.02)	$	0.37	$	0.56

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 25

The following table summarizes the outstanding stock options, RSUs, ESPP purchase options and convertible senior notes that were excluded from the diluted net income (loss) per common share calculation because the effects of including these potential shares were antidilutive in the periods presented (in thousands):

	Three Months Ended September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022
Weighted average number of stock options	7,057	6,344	5,953	2,439
Convertible senior notes	—	5,608	5,608	797
Weighted average number of RSUs	1,349	1,180	956	277
Weighted average ESPP purchase options	39	—	13	—
Total	8,445	13,132	12,530	3,513

For the three months ended September 30, 2022 and nine months ended September 30, 2023, the antidilutive impact associated with the Company’s convertible senior notes would have included an interest expense add-back to net income of $1.0 million and $3.1 million, respectively.

NOTE 13—INCOME TAXES

Income before income taxes and income tax expense are as follows (dollar amounts in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Income (loss) before income taxes:
Domestic	$	16,631		$	9,230		$	29,047		$	39,610
Foreign	(30)			(7,161)			(1,066)			(8,240)
Total income before income taxes	$	16,601		$	2,069		$	27,981		$	31,370
Income tax expense	$	5,743		$	2,762		$	10,896		$	5,359
Effective tax rate	35		%	133		%	39		%	17		%

The Company’s income tax expense represents the estimated annual effective tax rate applied to the year-to-date domestic operating results adjusted for certain discrete tax items.

The Company’s effective tax rates for the three and nine months ended September 30, 2023 include costs related to non-deductible stock-based compensation and non-deductible executive compensation, partially offset by credits and a fair value adjustment for Flexion contingent consideration.

The Company’s effective tax rates for the three and nine months ended September 30, 2022 include costs related to non-deductible executive compensation, valuation allowances recorded against non-U.S. operating results and U.S. capital losses, partially offset by benefits for a first quarter Skyepharma milestone payment, a fair value adjustment for Flexion contingent consideration and the impact of stock-based compensation adjustments.

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NOTE 14—CONTINGENT CONSIDERATION CHARGES (GAINS), RESTRUCTURING CHARGES AND OTHER

Contingent consideration charges (gains), restructuring charges and other for the three and nine months ended September 30, 2023 and 2022 summarized below (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Severance-related expenses	$	—	$	194	$	—	$	4,259
Acquisition-related fees	390		905		1,588		4,918
Other acquisition expenses	—		433		—		985
Total acquisition-related charges	390		1,532		1,588		10,162
Flexion contingent consideration	2,793		(520)		(3,847)		(13,837)
MyoScience contingent consideration	—		(523)		—		(9,557)
Restructuring charges	173		—		1,109		—
Total contingent consideration charges (gains), restructuring charges and other	$	3,356	$	489	$	(1,150)	$	(13,232)

Flexion Acquisition and Contingent Consideration

The Company recognized acquisition-related costs of $0.4 million and $1.6 million during the three and nine months ended September 30, 2023, respectively, primarily related to vacant and underutilized Flexion leases. The Company recognized acquisition-related costs of $1.5 million and $10.2 million during the three and nine months ended September 30, 2022, respectively, primarily related to severance, legal fees, third-party services and other one-time charges.

The Company recognized $2.8 million of contingent consideration charges and $3.8 million of contingent consideration gains during the three and nine months ended September 30, 2023, respectively. The Company recognized $0.5 million and $13.8 million of contingent consideration gains during the three and nine months ended September 30, 2022, respectively. See Note 9, Financial Instruments, for information regarding the method, key assumptions used in the fair value measurements of contingent consideration and more information regarding the changes in fair value.

MyoScience Contingent Consideration

The Company recognized $0.5 million and $9.6 million of contingent consideration gains during the three and nine months ended September 30, 2022, respectively. See Note 9, Financial Instruments, for information regarding the method, key assumptions used in the fair value measurements of contingent consideration and more information regarding the changes in fair value.

Restructuring Charges

In June 2023, the Company implemented a restructuring plan in an effort to improve its operational efficiencies. The restructuring charges are predominantly related to one-time employee termination benefits through a reduction of headcount, such as severance and related costs. During the three and nine months ended September 30, 2023, the Company recognized $0.2 million and $1.1 million, respectively, of restructuring charges, of which substantially all has been paid.

NOTE 15—COMMITMENTS AND CONTINGENCIES

From time to time, the Company has been and may again become involved in legal proceedings arising in the ordinary course of its business, including those related to patents, product liability and government investigations. Except as described below, the Company is not presently a party to any legal proceedings that it believes to be material, and is not aware of any pending or threatened litigation against the Company which it believes could have a material adverse effect on its business, operating results, financial condition or cash flows.

MyoScience Milestone Litigation

In August 2020, the Company and its subsidiary, Pacira CryoTech, Inc. (“Pacira CryoTech”), filed a lawsuit in the Court of Chancery of the State of Delaware against Fortis Advisors LLC (“Fortis”), solely in its capacity as representative for the former securityholders of MyoScience, and certain other defendants, seeking declaratory judgment with respect to certain terms of the merger agreement for the MyoScience Acquisition (the “MyoScience Merger Agreement”), specifically related to the achievement of certain milestone payments under the MyoScience Merger Agreement. In addition, the Company and Pacira

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 27

CryoTech sought general, special and compensatory damages against the other defendants related to breach of fiduciary duties in connection with the purported achievement of milestone payments under the MyoScience Merger Agreement, and breach of the MyoScience Merger Agreement and certain other agreements with the defendants. In October 2020, Fortis filed an answer and counterclaim against the Company and Pacira CryoTech seeking to recover certain milestone payments under the MyoScience Merger Agreement. The total remaining value of these milestones is $30.0 million, plus attorneys’ fees.

A trial was conducted in September 2023, and a decision is expected in the second half of 2024. The Company is unable to predict the outcome of this action at this time.

eVenus Pharmaceutical Laboratories Litigations

In October 2021, the Company received a Notice Letter advising that eVenus Pharmaceutical Laboratories, Inc., or eVenus, of Princeton, New Jersey, submitted to the FDA an Abbreviated New Drug Application, or ANDA with a Paragraph IV certification seeking authorization for the manufacturing and marketing of a generic version of EXPAREL (266 mg/20 mL) in the U.S. prior to the expiration of U.S. Patent No. 11,033,495 (the ’495 patent).

In November 2021, the Company filed a patent infringement suit against eVenus and its parent company in the U.S. District Court for the District of New Jersey (21-cv-19829) asserting infringement of the ’495 patent. This triggered an automatic 30-month stay of final approval of the eVenus ANDA. On January 6, 2022, eVenus filed an Answer with counterclaims to the Complaint, alleging the ’495 patent is invalid and/or not infringed through the manufacture, sale, or offer for sale of the product described in product described in eVenus’s ANDA submission.

In December 2021, the Company received a second Notice Letter advising that eVenus submitted to the FDA an amendment to its ANDA with a Paragraph IV Certification seeking authorization for the manufacturing and marketing of a generic version of EXPAREL (133 mg/10 mL) in the U.S. prior to the expiration of the ’495 patent. In the Notice Letter, eVenus also advised that it submitted a Paragraph IV Certification to the FDA seeking authorization for the manufacturing and marketing of a generic version of EXPAREL (266 mg/20 mL and 133 mg/10 mL) in the U.S. prior to the expiration of U.S. Patent No. 11,179,336 (the ’336 patent). eVenus further alleges in the Notice Letter that both the ’495 patent and the ’336 patent are invalid and/or not infringed.

In February 2022, the Company filed a second patent infringement suit against eVenus and its parent company in the U.S. District Court for the District of New Jersey (22-cv-00718) asserting that the 133 mg/10 mL ANDA product will infringe the ’495 and ’336 patents and that the 266 mg/20 mL ANDA product will infringe the ’336 patent. This filing triggered a second automatic 30-month stay of final approval for the 133 mg/10 mL ANDA product. The first and second patent infringement suits were consolidated.

In February 2023, eVenus filed its first amended answer to the first amended complaint, alleging patent invalidity, non-infringement and inequitable conduct. The Company has denied the allegations in eVenus’s first amended answer. The Company has subsequently voluntarily dismissed its claims with respect to the ’336 Patent. A trial on the remaining claims is currently scheduled for February 2024.

In April 2023, the Company filed a third patent infringement suit against eVenus, its parent company, and Fresenius Kabi USA, LLC, in the U.S. District Court for the District of New Jersey (23-cv-2367) asserting that the 133 mg/10 mL and 266 mg/20 mL ANDA products will infringe U.S. Patent No. 11,426,348 (the ’348 patent). In July 2023, eVenus filed its answer with claims for declaratory judgment, alleging patent invalidity, non-infringement and inequitable conduct with respect to the ’348 patent as well as the Company’s other patents, U.S. Patent Nos. 11,278,494; 11,304,904; 11,311,486; 11,357,727 and 11,452,691.The parties have subsequently dismissed all patents other than the ’348 patent from this litigation.

The Company is unable to predict the outcome of this litigation at this time.

Research Development Foundation

Pursuant to an agreement with the Research Development Foundation, or RDF, the Company was required to pay RDF a low single-digit royalty on the collection of revenues from certain products, for as long as certain patents assigned to the Company under the agreement remain valid. RDF has the right to terminate the agreement for an uncured material breach by the Company, in connection with its bankruptcy or insolvency or if it directly or indirectly opposes or disputes the validity of the assigned patent rights. The Company’s ’495 patent was issued on June 15, 2021. Thereafter, RDF asserted that the issuance of that patent extends the Company’s royalty obligations under the agreement until 2041. The Company believes that the royalty period under the agreement ended on December 24, 2021 with the expiration of its U.S. Patent No. 9,585,838. Because of the disagreement over the interpretation of the agreement, in December 2021, the Company filed a declaratory judgment

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 28

lawsuit in the U.S. District Court for the District of Nevada (21-cv-02241). The lawsuit seeks a declaration from the court that the Company owes no royalties to RDF with respect to its EXPAREL product after December 24, 2021.

On August 8, 2023, the United States District Court, District of Nevada, granted the Company’s motion for partial summary judgment in respect to the Company’s claim for a declaration that it no longer owes royalties for EXPAREL made under the 45-liter manufacturing process as of December 24, 2021. As a result, the Company expects to receive $14.5 million from RDF, representing the royalties that the Company paid to RDF under protest after December 24, 2021 for EXPAREL made from the 45-liter manufacturing process. Once it becomes probable that the settlement amount will be received, the Company will record a settlement gain within other operating expenses in the condensed consolidated statement of operations. During the pendency of the remaining lawsuit, the Company will continue to pay royalties associated with the 200-liter manufacturing process to RDF under protest. The Company is unable to predict the outcome of this action at this time.

Other Commitments and Contingencies

Pediatric Trial Commitments

The FDA, as a condition of EXPAREL approval, has required the Company to study EXPAREL for infiltration and as a brachial plexus block in the pediatric setting. The Company was granted deferrals for the required pediatric trials until after the indications were approved in adults. Similarly, in Europe, the Company agreed with the European Medicines Agency, or EMA, on a Pediatric Investigation Plan as a prerequisite for submitting a Marketing Authorization Application (MAA) in the E.U. Despite the U.K.’s withdrawal from the E.U., the agreed pediatric plan is applicable in the U.K.

In December 2019, the Company announced positive results for its extended pharmacokinetic and safety study (“PLAY”) for local analgesia in children aged six to 17 undergoing cardiovascular or spine surgeries. Those positive results were the basis for the submission of a supplemental New Drug Application, or sNDA, in the U.S. to include use in patients six years of age and older for single-dose infiltration to produce postsurgical local analgesia. In March 2021, the Company announced that the FDA approved the sNDA in the U.S. In the E.U. and U.K., the Company also submitted the results of the PLAY study as Type II variations in the E.U. and U.K. to include the use of EXPAREL in children aged six years or older as a field block for treatment of somatic post-operative pain for small- to medium-sized wounds. The EMA and the Medicines and Healthcare Products Regulatory Agency, or MHRA, in the U.K. both approved the variations in their respective regions in November 2022. The Company received notification from the FDA in October 2023 that its pediatric studies requirement had been waived for the indication of brachial plexus interscalene nerve block to produce postsurgical regional analgesia in pediatric patients. The Company is still working with the FDA, EMA and MHRA to finalize the regulatory pathways for its remaining pediatric commitments.

Contingent Milestone Payments

Refer to Note 9, Financial Instruments, for information on potential contingent milestone payments related to the Flexion Acquisition and MyoScience Acquisition.

PCRX-201

PCRX-201, a novel, intra-articular gene therapy product candidate that produces the anti-inflammatory protein interleukin-1 receptor antagonist (IL-1Ra) treating OA pain in the knee, was added to the Company’s portfolio as part of the Flexion Acquisition in November 2021. Prior to the Flexion Acquisition, in February 2017, Flexion entered into an agreement with GQ Bio Therapeutics GmbH (formerly named GeneQuine Biotherapeutics GmbH) to acquire the global rights to PCRX-201, a gene therapy product candidate. As part of the agreement, up to an aggregate of $56.0 million of payments could become due upon the achievement of certain development and regulatory milestones, including up to $4.5 million through initiation of a Phase 2 proof of concept clinical trial and, following successful proof of concept, up to an additional $51.5 million in development and global regulatory approval milestone payments.

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 29

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP) and in accordance with the rules and regulations of the United States Securities and Exchange Commission, or SEC.

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 Flexion Acquisition (as defined below) and the costs and benefits thereof, our growth and future operating results and trends, our strategy, plans, objectives, expectations (financial or otherwise) and intentions, future financial results and growth potential, including our plans with respect to the repayment of our indebtedness, anticipated product portfolio, development programs, patent terms, development of products, strategic alliances and intellectual property. 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 “believe,” “anticipate,” “plan,” “estimate,” “expect,” “intend,” “may,” “will,” “would,” “could,” “can” 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: the successful transition of our chief executive officer and chairman; risks associated with acquisitions, such as the risk that the acquired businesses 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; the lingering impact of the COVID-19 pandemic on elective surgeries, our manufacturing and supply chain, global and United States, or U.S., economic conditions (including 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), ZILRETTA® (triamcinolone acetonide extended-release injectable suspension) and iovera°®; the rate and degree of market acceptance of EXPAREL, ZILRETTA and iovera°; the size and growth of the potential markets for EXPAREL, ZILRETTA and iovera° and our ability to serve those markets; our plans to expand the use of EXPAREL, ZILRETTA and iovera° to additional indications and opportunities, and the timing and success of any related clinical trials for EXPAREL, ZILRETTA and iovera°; the commercial success of EXPAREL, ZILRETTA and iovera°; the related timing and success of United States Food and Drug Administration, or FDA, supplemental New Drug Applications, or sNDAs, and premarket notification 510(k)s; the related timing and success of European Medicines Agency, or EMA, Marketing Authorization Applications, or MAAs; our plans to evaluate, develop and pursue additional product candidates utilizing our proprietary multivesicular liposome, or pMVL, drug delivery technology; the approval of the commercialization of our products in other jurisdictions; clinical trials in support of an existing or potential pMVL-based product; our commercialization and marketing capabilities; our ability to successfully complete an EXPAREL capacity expansion project in San Diego, California; our ability to successfully complete a ZILRETTA capital project in Swindon, England; the outcome of any litigation; the ability to successfully integrate any future acquisitions into our existing business; the recoverability of our deferred tax assets; and assumptions associated with contingent consideration payments.

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.

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these statements. These factors include items mentioned herein and the matters discussed and referenced in Part I-Item 1A. “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report”) and in other reports as filed with the SEC.

Unless the context requires otherwise, references to “Pacira,” “we,” the “Company,” “us” and “our” in this Quarterly Report on Form 10-Q refer to Pacira BioSciences, Inc. and its subsidiaries.

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 30

Overview

Pacira is the industry leader in our commitment to non-opioid pain management and providing non-opioid pain management options to as many patients as possible to redefine the role of opioids as rescue therapy only. We are also developing innovative interventions to address debilitating conditions involving the sympathetic nervous system, such as cardiac electrical storm, chronic pain and spasticity. Our long-acting, local analgesic EXPAREL® (bupivacaine liposome injectable suspension) 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 opioid-free, long-acting local and regional analgesic approved for infiltration, field blocks and interscalene brachial plexus nerve block to produce local or regional postsurgical analgesia. EXPAREL is also approved for infiltration in pediatric patients aged six years and older in the U.S. 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. Since its initial approval in 2011, more than 13 million patients have been treated with EXPAREL. We drop-ship EXPAREL directly to end-users based on orders placed to wholesalers or directly to us, and there is no product held by wholesalers. With the acquisition of Flexion Therapeutics, Inc., or Flexion, in November 2021 (the “Flexion Acquisition”), we acquired ZILRETTA® (triamcinolone acetonide extended-release injectable suspension), the first and only extended-release, intra-articular therapy that can provide major relief for osteoarthritis, or OA, knee pain for three months and has the potential to become an alternative to hyaluronic acid, platelet rich plasma injections or other early intervention treatments. With the acquisition of MyoScience, Inc., or MyoScience, in April 2019 (the “MyoScience Acquisition”), we acquired iovera°®, a handheld cryoanalgesia device used to deliver a precise, controlled application of cold temperature to targeted nerves, which we sell directly to end users. EXPAREL, ZILRETTA and the iovera° system are highly complementary products as long-acting, non-opioid therapies that alleviate pain.

We expect to continue to pursue the expanded use of EXPAREL, ZILRETTA and iovera° in additional procedures; progress our earlier-stage product candidate pipeline; advance regulatory activities for EXPAREL, ZILRETTA, iovera° and our other product candidates; invest in sales and marketing resources for EXPAREL, ZILRETTA and iovera°; expand and enhance our manufacturing capacity for EXPAREL, ZILRETTA and iovera°; invest in products, businesses and technologies; and support legal matters.

Global Economic Conditions

Direct and indirect effects of global economic conditions may negatively impact our business, financial condition and results of operations. Such impacts may include, but are not limited to, the effect of prolonged periods of inflation on our customers and suppliers and longer lead-times or the inability to secure a sufficient supply of materials. Additional negative impacts may also arise that we are unable to foresee. The nature and extent of such impacts are subject to material change, and will depend on future developments which are dynamic, highly uncertain and cannot be predicted.

Recent Highlights

•In October 2023, we announced the appointments of Marcelo Bigal, MD, PhD, Abraham Ceesay, Michael Yang and Alethia Young to our Board of Directors. Each of the new directors adds diversity of experience and background to the Pacira board of directors, while also enhancing racial and gender diversity. Following these director appointments, Pacira now has 12 experienced directors, all with relevant industry experience.

•In October 2023, we announced a grant of $2.5 million to the American Society of Anesthesiologists, or ASA, Charitable Foundation, to advance the medical specialty of anesthesiology and pain medicine; facilitate best-in-class clinician education and improve patient care. We also joined ASA’s Industry Supporter Program to support the Society’s more than 56,000 physician anesthesiologist members to improve patient care and reduce reliance on opioids for the treatment of postsurgical or chronic pain. As an Industry Supporter, Pacira is helping to establish a strong, mutually beneficial relationship with the anesthesiology community, strengthen collaboration between physician anesthesiologists and industry, and add to the value the Society provides to patients and the public, while providing invaluable year-round support of ASA programs and priorities related to non-opioid alternatives and postsurgical care.

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 31

EXPAREL

In the U.S., EXPAREL is currently indicated for single-dose infiltration in patients six years of age and older to produce postsurgical local analgesia and in adults as an interscalene brachial plexus nerve block to produce postsurgical regional analgesia. 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 in children aged 6 years or older as a field block for treatment of somatic post-operative pain from small- to medium-sized surgical wounds.

EXPAREL Label and Global Expansion

•Lower extremity nerve block. The FDA is currently reviewing our sNDA seeking expansion of the EXPAREL label to include lower extremity nerve block procedures with a Prescription Drug User Fee Act, or PDUFA, action date of November 13, 2023. Our application is based on positive results from two Phase 3 registration studies. The first study, which evaluated EXPAREL admixed with bupivacaine HCl as a femoral nerve block in the adductor canal in patients undergoing total knee arthroplasty, or TKA, achieved the primary endpoint, demonstrating a statistically significant reduction in cumulative pain scores from 0 to 96 hours compared with bupivacaine HCl (p<0.01). EXPAREL admixed with bupivacaine HCl also achieved a statistically significant reduction in postsurgical opioid consumption through 96 hours (p<0.01) compared with bupivacaine HCl, a key secondary endpoint. The second study, which evaluated EXPAREL as a sciatic nerve block in the popliteal fossa in patients undergoing bunionectomy, achieved the primary endpoint by demonstrating a statistically significant reduction in cumulative pain scores from 0 to 96 hours compared with bupivacaine HCl (p<0.00001). EXPAREL achieved a statistically significant reduction in postsurgical opioid consumption (p<0.00001) and a statistically significant percentage of opioid-free subjects (p<0.001) through 96 hours compared with bupivacaine HCl, which were key secondary endpoints. EXPAREL was well tolerated with a safety profile consistent with bupivacaine HCl.

•Pediatrics. We expect to initiate a Phase 1 pharmacokinetic study after which we would initiate a registration study to support expansion of the EXPAREL single-dose infiltration label to include patients under six years of age. If successful, we expect this study, followed by a larger Phase 3 study, will support expansion of the EXPAREL labels in the U.S. and E.U. We are also discussing with the FDA, EMA and Medicines and Healthcare Products Regulatory Agency (MHRA) our regulatory strategy for EXPAREL administered as a nerve block in the pediatric setting. The Company received notification from the FDA in October 2023 that its pediatric studies requirement had been waived for the indication of brachial plexus interscalene nerve block to produce postsurgical regional analgesia in pediatric patients.

•Stellate ganglion block. Planning is underway for a multicenter Phase 3 registration study of EXPAREL as a stellate ganglion block for preventing postoperative atrial fibrillation after cardiothoracic surgery. We are working with a steering committee of Key Opinion Leaders in regional anesthesia and stellate ganglion blocks to help finalize study design. We are also working to align with the FDA on our plan to expand the EXPAREL label to include stellate ganglion block in the event that the results of the Phase 3 study are sufficiently positive. We believe a stellate ganglion block utilizing EXPAREL will be critical in an unmet need with post-operative ventricular and atrial dysrhythmias.

•Global expansion. 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 as a field block for treatment of somatic post-operative pain from small- to medium-sized surgical wounds in children aged six years or older. We launched EXPAREL in the U.K. and targeted E.U. countries in 2021. In Latin America, we have a distribution agreement with Eurofarma Laboratories S.A., or Eurofarma, for the development and commercialization of EXPAREL. Eurofarma has the exclusive right to market and distribute EXPAREL in 19 countries in Latin America, including Argentina, Brazil, Colombia and Mexico. In addition, Eurofarma will be responsible for regulatory filings for EXPAREL in these countries. We will receive royalties and are also eligible to receive regulatory- and commercial-based milestone payments that are triggered by the achievement of certain events.

ZILRETTA

ZILRETTA is the first and only extended-release, intra-articular therapy for OA knee pain. ZILRETTA employs a proprietary microsphere technology combining triamcinolone acetonide, or TA, a commonly administered, immediate-release corticosteroid, with a poly lactic-co-glycolic acid, or PLGA, matrix to provide extended pain relief. PLGA is a proven extended-release delivery vehicle that is metabolized to carbon dioxide and water as it releases drug in the intra-articular space

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and is used in other approved drug products and surgical devices. The ZILRETTA microspheres slowly and continuously release triamcinolone acetonide into the knee to provide significant pain relief for 12 weeks, with some people experiencing pain relief through 16 weeks. ZILRETTA was approved by the FDA in October 2017 and launched in the U.S. shortly thereafter.

We believe ZILRETTA’s extended-release profile may also provide effective treatment for OA pain of the shoulder, and we intend to initiate a Phase 3 trial investigating ZILRETTA in shoulder OA in the first half of 2024. In addition, we are evaluating a study in knee OA patients comparing ZILRETTA to immediate release TA in patients with Type 2 diabetes.

ZILRETTA Clinical Benefits

ZILRETTA combines a commonly administered steroid, TA, with PLGA, delivering a 32 mg dose of TA to provide extended therapeutic concentrations in the joint and persistent analgesic effect.

Based on the strength of its pivotal and other clinical trials, we believe that ZILRETTA represents an important treatment option for the millions of patients in the U.S. in need of safe and effective extended relief from OA knee pain. The pivotal Phase 3 trial showed that ZILRETTA significantly reduced OA knee pain for 12 weeks, with some people experiencing pain relief through 16 weeks. Both the magnitude and duration of pain relief provided by ZILRETTA in clinical trials were clinically meaningful with the magnitude of pain relief among the largest seen to date in OA clinical trials. The overall frequency of treatment-related adverse events in these trials was similar to those observed with placebo, and no drug-related serious adverse events were reported. We believe that ZILRETTA holds the potential to become the corticosteroid of choice given its safety and efficacy profile, and the fact that it is the first and only extended-release corticosteroid on the market. In September 2021, the American Association of Orthopaedic Surgeons, or AAOS, updated its evidence-based clinical practice guidelines, finding ZILRETTA can improve patient outcomes over traditional immediate-release corticosteroids.

Planning is underway for a multicenter Phase 3 registration study of ZILRETTA for the treatment of glenohumeral OA. We received agreement from the FDA to move forward with that study, and we plan to expand the ZILRETTA label to include OA of the shoulder in the event that the results of the Phase 3 study are sufficiently positive.

iovera°

The iovera° system is a non-opioid handheld cryoanalgesia device used to produce precise, controlled doses of cold temperature to targeted nerves. It is FDA 510(k) cleared in the U.S., has a CE mark in the E.U. and is cleared for marketing in Canada for the blocking of pain. We believe the iovera° system is highly complementary to EXPAREL and ZILRETTA as a non-opioid therapy that alleviates pain using a non-pharmacological nerve block to disrupt pain signals being transmitted to the brain from the site of injury or surgery. It is also indicated for the relief of pain and symptoms associated with arthritis of the knee for up to 90 days.

iovera° Clinical Benefits

There is a growing body of clinical data demonstrating success with iovera° treatment for OA of the knee. Surgical intervention is typically a last resort for patients suffering from OA of the knee. In one study, the majority of the patients suffering from OA of the knee experienced pain relief up to 150 days after being treated with iovera°.

Preliminary findings demonstrated reductions in opioids, including:

•The daily morphine equivalent consumption in the per protocol group analysis was significantly lower at 72 hours (p<0.05), 6 weeks (p<0.05) and 12 weeks (p<0.05).

•Patients who were administered iovera° were far less likely to take opioids six weeks after surgery. The number of patients taking opioids six weeks after TKA in the control group was three times the number of patients taking opioids in the cryoanalgesia group (14% vs. 44%, p<0.01).

•Patients in the iovera° group demonstrated a statistically significant reduction in pain scores from their baseline pain scores at 72 hours (p<0.05) and at 12 weeks (p<0.05).

We believe these data validate iovera° as a clinically meaningful non-opioid alternative for patients undergoing TKA, and that iovera° offers the opportunity to provide patients with non-opioid pain control well in advance of any necessary surgical intervention through a number of key product attributes:

•iovera° is safe and effective with immediate pain relief that can last for months as the nerve regenerates over time;

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 33

•iovera° is repeatable;

•The iovera° technology does not risk damage to the surrounding tissue;

•iovera° is a convenient handheld device with a single-use procedure-specific Smart Tip; and

•iovera° can be delivered precisely using ultrasound guidance or an anatomical landmark.

In September 2021, the AAOS updated its evidence-based clinical practice guidelines, reporting that denervation therapy—including cryoneurolysis—may reduce knee pain and improve function in patients with symptomatic OA of the knee.

We are also encouraged by usage of iovera° in other areas. Key Opinion Leaders in orthopedics, spine and anesthesia are interested in replacing heat-based radiofrequency ablation with iovera° cold therapy. There is interest across a wide range of treatment opportunities such as low back pain, spine, spasticity and rib fracture. We intend to use investigator-initiated studies and grants to develop data across these areas.

iovera° Global Expansion

In July 2021, we entered into a licensing agreement with Verve Medical Products, Inc. for the distribution of iovera° in Canada. We began selling iovera° in Canada in the fourth quarter of 2021. Additionally, we began selling iovera° in the E.U. through a contracted sales force in the first quarter of 2022.

The Osteoarthritis Market

OA is the most common form of arthritis. It is also called degenerative joint disease and occurs most frequently in the hands, hips and knees. With OA, the cartilage within a joint begins to break down and the underlying bone begins to change. These changes usually develop slowly and worsen over time. OA can cause pain, stiffness and swelling. In some cases it also causes reduced function and disability—some people are no longer able to do daily tasks or work. According to the Centers for Disease Control and Prevention, OA affects over 32.5 million adults in the U.S.

The lifetime risk of developing symptomatic knee OA is 45 percent according to the Arthritis Foundation. The prevalence of symptomatic knee OA increases with each decade of life, with the annual incidence of knee OA being highest between age 55 and 64 years old. There are 14 million individuals in the U.S. who have symptomatic knee OA, and nearly two million are under the age of 45. Surgical intervention is typically a last resort for patients suffering from OA of the knee.

With the addition of ZILRETTA to our product offering, we can now offer clinicians the flexibility to individualize OA knee pain treatment with either ZILRETTA or a drug-free nerve block with iovera° based on patient factors and preference, physician training, site of care and reimbursement considerations.

Clinical Development Programs

PCRX-201

PCRX-201 is a novel, IA gene therapy product candidate that produces the anti-inflammatory protein, IL-1Ra, for treating OA pain in the knee. Based upon compelling initial Phase 1 efficacy and safety data for PCRX-201, we are preparing to initiate a second Phase 1 study in OA of the knee and intend to request a Regenerative Medicine Advanced Therapy, or RMAT, designation. PCRX-201 was added to our portfolio as part of the Flexion Acquisition.

pMVL-Based Clinical Programs

Given the proven safety, flexibility and customizability of our pMVL drug delivery technology platform for acute, sub-acute and chronic pain applications, we have several pMVL-based products in clinical development. Following data readouts from preclinical and feasibility studies for these candidates, we have prioritized three programs for clinical development: (i) PCRX-401, a dexamethasone-pMVL for low back pain; (ii) PCRX-501, a high potency bupivacaine-pMVL for longer-lasting pain relief (20.0 mg/mL) and (iii) EXPAREL for intrathecal analgesia (13.3 mg/mL). We initiated a second Phase 1 study of EXPAREL for intrathecal analgesia in June 2023.

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External Innovation

In parallel to our internal clinical programs, our business development team is pursuing innovative acquisition targets that are complementary to EXPAREL, ZILRETTA and iovera° and are of great interest to the surgical and anesthesia audiences we are already calling on today. We are using a combination of strategic investments, in-licensing and acquisition transactions to buildout a pipeline of innovation to improve patients’ journeys along the neural pain pathway. The strategic investments we have made to support promising early stage platforms are summarized below:

Company	Development Stage	Description of Platform Technology	Potential Therapeutic Areas
CarthroniX, Inc.	Phase 1-Ready	CX-011, a small molecule modulator of gp130 formulated as an intra-articular injection designed to slow joint degeneration by mediating IL-6 cytokines	Knee OA
Genascence Corporation	Phase 1b	Adeno-associated virus (AAV) based gene therapy engineered to deliver Interleukin-1 Receptor Antagonist (IL-1Ra) to target cells in joint(s)	Knee OA
GQ Bio Therapeutics GmbH	Preclinical	High capacity adenovirus (HCAd) based gene therapy engineered to deliver DNA to target cells in joint(s) and intervertebral disc(s)	Knee OA and degenerative disc disease (DDD)
Spine BioPharma, LLC	Phase 3	SB-01, a 7-amino acid chain peptide that binds to and induces down regulation of transforming growth factor, beta 1 (TGFβ1)	Degenerative disc disease (DDD)

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Product Portfolio and Internal Pipeline

Our current product portfolio and internal product candidate pipeline, along with anticipated milestones over the next 12 to 18 months, are summarized in the table below:

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Pacira Training Facilities

We maintain and operate two training facilities—one in Tampa, Florida and one in Houston, Texas. These sites were constructed with a singular goal in mind: to advance education on best practice techniques to effectively manage acute pain while reducing or eliminating the need for opioids. These facilities provide clinicians with flexible, state-of-the-art environments for interactive, hands-on instruction on the latest and most innovative local, regional and field block approaches for managing pain, improving patient care and enabling patient migration to the 23-hour stay environment.

Tampa, Florida

In October 2020, we opened the Pacira Innovation and Training, or PIT, Center of Tampa. We designed this facility to help advance clinician understanding of the latest local, regional and field block approaches for managing pain. The PIT of Tampa provides an unparalleled training environment for healthcare providers working to reduce or eliminate patient exposure to opioids. The PIT of Tampa supports a full range of educational events to advance clinician understanding of the latest local, regional, and field block approaches for managing pain and reducing or eliminating exposure to opioids. Our principal executive offices and corporate headquarters are also located at the PIT of Tampa.

The PIT of Tampa consists of approximately 13,000 square-feet of fully adaptable space and is equipped with state-of-the-art technology and audio/visual capabilities and features several distinct training spaces including a simulation lab equipped with seven ultrasound scanning stations; a lecture hall featuring a 4½-foot tall by 24-foot wide liquid crystal display video wall to support live, virtual and even global presentations; and a green-screen broadcast studio designed to livestream content with single or multiple hosts.

In addition to our EXPAREL programs, we are hosting ongoing workshops to train new users on best practice techniques for iovera° administration at the PIT of Tampa. Led by healthcare professionals, these labs include didactic lectures and hands-on trainings including live model nerve scanning and identification using ultrasound and peripheral nerve stimulation.

At no fee to the organization, the PIT of Tampa also serves as a venue for national anesthesia provider organizations to host their own workshops and training sessions to educate healthcare providers.

Houston, Texas

In January 2023, we opened our second training facility, the Houston Pacira Innovation and Training Center, in Houston, Texas. This 19,000 square-foot state-of-the-art facility features a 125-seat adaptive lecture hall featuring the same liquid crystal display video wall that the PIT of Tampa has, a broadcast studio and both wet and dry lab space for cadaver and other interactive workshops. A simulation lab is equipped with eight advanced ultrasound machines equipped with artificial intelligence and 3-D training software in addition to professional medical lighting and in-ceiling cameras. The PIT of Houston is core to developing both our physician champions and community-based clinicians who want to stay on the forefront of opioid-sparing pain management. With this new training facility, we have doubled our capacity and ability to host programs for EXPAREL, ZILRETTA and iovera°.

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Results of Operations

Comparison of the Three and Nine Months Ended September 30, 2023 and 2022

Revenues

Total revenues consist of sales of (i) EXPAREL in the U.S., E.U., and U.K.; (ii) ZILRETTA in the U.S.; (iii) iovera° in the U.S., Canada and the E.U. and (iv) sales of, and royalties on, our bupivacaine liposome injectable suspension for veterinary use.

The following table provides information regarding our revenues during the periods indicated, including percent changes (dollar amounts in thousands):

	Three Months Ended September 30,				% Increase / (Decrease)	Nine Months Ended September 30,				% Increase / (Decrease)
	2023		2022			2023		2022
Net product sales:
EXPAREL	$	128,667	$	132,642	(3)%	$	394,202	$	398,854	(1)%
ZILRETTA	28,798		26,494		9%	82,393		77,546		6%
iovera°	5,260		4,467		18%	13,645		10,694		28%
Bupivacaine liposome injectable suspension	858		2,957		(71)%	2,241		5,469		(59)%
Total net product sales	163,583		166,560		(2)%	492,481		492,563		(0)%
Royalty revenue	343		906		(62)%	1,253		2,305		(46)%
Total revenues	$	163,926	$	167,466	(2)%	$	493,734	$	494,868	(0)%

EXPAREL revenue decreased 3% and 1% in the three and nine months ended September 30, 2023 versus 2022, respectively, primarily due to decreases of 4% in net selling price per unit in each period related to enrolling EXPAREL in the 340B drug pricing program and expanding other contracting activities, partially offset by a January 2023 price increase. EXPAREL revenue was also impacted by increases in gross vial volumes of 2% and 4% in the three and nine months ended September 30, 2023 versus 2022, respectively, and reduced by 1% due to a shift in sales mix in both periods.

ZILRETTA revenue increased 9% and 6% in the three and nine months ended September 30, 2023 versus 2022, respectively, primarily due to increases of 6% in gross kit volume in both periods and increases of 2% and 1% in net selling price per unit during the applicable periods.

Net product sales of iovera° increased 18% and 28% in the three and nine months ended September 30, 2023 versus 2022, respectively, due to increases of 22% and 31% in Smart Tip volume and increases of 2% and 3% in selling price per Smart Tip, respectively, partially offset by a higher returns allowance.

Bupivacaine liposome injectable suspension net product sales decreased 71% and 59% in the three and nine months ended September 30, 2023 versus 2022, respectively. Its related royalties decreased 62% and 46% in the three and nine months ended September 30, 2023 versus 2022, respectively, primarily due to the timing and product mix of orders and related sales made by Aratana Therapeutics, Inc. for veterinary use.

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, 2023 and 2022 (in thousands):

September 30, 2023	Returns Allowances		Prompt Payment Discounts		Service Fees		Volume Rebates and Chargebacks		Government Rebates		Total
Balance at December 31, 2022	$	1,691	$	1,187	$	3,193	$	5,452	$	786	$	12,309
Provision	1,710		8,835		13,414		69,982		1,588		95,529
Payments / Adjustments	(1,287)		(8,874)		(13,218)		(68,676)		(1,460)		(93,515)
Balance at September 30, 2023	$	2,114	$	1,148	$	3,389	$	6,758	$	914	$	14,323

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September 30, 2022	Returns Allowances		Prompt Payment Discounts		Service Fees		Volume Rebates and Chargebacks		Government Rebates		Total
Balance at December 31, 2021	$	3,361	$	1,178	$	3,636	$	3,494	$	761	$	12,430
Provision	953		8,213		12,358		30,122		1,162		52,808
Payments / Adjustments	(2,802)		(8,286)		(13,069)		(29,092)		(1,181)		(54,430)
Balance at September 30, 2022	$	1,512	$	1,105	$	2,925	$	4,524	$	742	$	10,808

Total reductions of gross product sales from sales-related allowances and accruals were $95.5 million and $52.8 million, or 16.3% and 9.7% of gross product sales, for the nine months ended September 30, 2023 and 2022, respectively. The overall 6.6% increase in sales-related allowances and accruals as a percentage of gross product sales was primarily related to accruals as a result of enrolling EXPAREL in the 340B drug pricing program and chargeback-related allowances.

Cost of Goods Sold

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, royalty payments, quality control and engineering.

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):

	Three Months Ended September 30,						% Increase / (Decrease)	Nine Months Ended September 30,						% Increase / (Decrease)
	2023			2022				2023			2022
Cost of goods sold	$	39,750		$	50,678		(22)%	$	136,977		$	137,379		(0)%
Gross margin	76		%	70		%		72		%	72		%

Gross margin increased six percentage-points in the three months ended September 30, 2023 versus 2022, mainly due to lower royalty expense due to no longer owing royalties for EXPAREL made under the 45-liter manufacturing process (as further discussed below) and lower inventory reserves. These increases were partially offset by an increase in sales-related allowances and accruals as a result of enrolling EXPAREL in the 340B drug pricing program which resulted in a lower net selling price in the period. Also offsetting were higher ZILRETTA product cost sold in the period.

Gross margin remained flat in the nine months ended September 30, 2023 versus 2022, mainly due to higher EXPAREL product cost and sales-related allowances and accruals as a result of enrolling EXPAREL in the 340B drug pricing program, which resulted in a lower net selling price in the period. This was offset by higher costs in 2022 for the transition of iovera° manufacturing sites and next-generation handheld devices.

On August 8, 2023, the United States District Court, District of Nevada, concluded we are no longer obligated to pay royalties to the Research and Development Foundation for EXPAREL made under the 45-liter manufacturing process. For more information, see Note 15, Commitments and Contingencies, to our condensed consolidated financial statements included herein.

Research and Development Expenses

Research and development expenses primarily consist of costs related to clinical trials and related outside services, product development and other research and development costs, including trials that we are conducting to generate new data for EXPAREL, ZILRETTA and iovera° and stock-based compensation expense. Clinical and preclinical development expenses include costs for clinical personnel, clinical trials performed by third-parties, toxicology studies, materials and supplies, database management and other third-party fees. Product development and manufacturing capacity expansion expenses include development costs for our products, which include personnel, equipment, materials and contractor costs for process development and product candidates, development costs related to significant scale-ups of our manufacturing capacity and facility costs for our research space. Regulatory and other expenses include regulatory activities related to unapproved products and indications, medical information expenses, registry expenses and related personnel. Stock-based compensation expense relates to the costs of stock option grants, awards of restricted stock units, or RSUs, and our employee stock purchase plan, or ESPP.

The following table provides a breakout of our research and development expenses during the periods indicated, including percent changes (dollar amounts in thousands):

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 39

	Three Months Ended September 30,						% Increase / (Decrease)	Nine Months Ended September 30,						% Increase / (Decrease)
	2023			2022				2023			2022
Clinical and preclinical development	$	6,808		$	8,384		(19)%	$	17,263		$	39,558		(56)%
Product development and manufacturing capacity expansion	9,419			7,245			30%	26,396			17,318			52%
Regulatory and other	2,383			1,993			20%	7,318			5,655			29%
Stock-based compensation	2,220			1,783			25%	5,817			4,761			22%
Total research and development expense	$	20,830		$	19,405		7%	$	56,794		$	67,292		(16)%
% of total revenues	13		%	12		%		12		%	14		%

Total research and development expense increased 7% and decreased 16% in the three and nine months ended September 30, 2023 versus 2022, respectively.

Clinical and preclinical development expense decreased 19% and 56% in the three and nine months ended September 30, 2023 versus 2022, respectively, due to the completion of two EXPAREL lower extremity nerve block trials in bunionectomy and TKA in the third quarter of 2022, toxicology studies that are near completion for product candidates, partially offset by start-up costs for both ZILRETTA shoulder and iovera° spasticity trials.

Product development and manufacturing capacity expansion expense increased 30% and 52% in the three and nine months ended September 30, 2023 versus 2022, respectively, mainly attributable to the continued scale-up activities of our EXPAREL manufacturing capacity at our Science Center Campus in San Diego, California (for which a prior approval supplement was submitted to the FDA in October 2023 with an anticipated PDUFA action date in February 2024), as well as new product development costs related to gene therapy.

Regulatory and other expense increased 20% and 29% in the three and nine months ended September 30, 2023 versus 2022, respectively, due to increased enrollment and additional sites related to an observational iovera° registry study which tracks patients’ symptoms and experience with pain management related to OA of the knee, and increased medical information publications.

Stock-based compensation increased 25% and 22% in the three and nine months ended September 30, 2023 versus 2022, respectively, primarily due to greater equity awards outstanding for research and development personnel, partially offset by a lower fair value of newer equity awards granted.

Selling, General and Administrative Expenses

Sales and marketing expenses primarily consist of compensation and benefits for our sales force and personnel that support our sales, marketing, medical and scientific affairs operations, expenses related to communicating the health outcome benefits of our products, investments in provider-level market access and patient reimbursement support and educational programs for our customers. 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, RSU awards and our ESPP.

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The following table provides information regarding our selling, general and administrative expenses during the periods indicated, including percent changes (dollar amounts in thousands):

	Three Months Ended September 30,						% Increase / (Decrease)	Nine Months Ended September 30,						% Increase / (Decrease)
	2023			2022				2023			2022
Sales and marketing	$	38,261		$	33,706		14%	$	117,302		$	109,000		8%
General and administrative	20,648			18,277			13%	61,112			55,321			10%
Stock-based compensation	9,038			9,300			(3)%	25,226			26,225			(4)%
Total selling, general and administrative expense	$	67,947		$	61,283		11%	$	203,640		$	190,546		7%
% of total revenues	41		%	37		%		41		%	39		%

Total selling, general and administrative expense increased 11% and 7% in the three and nine months ended September 30, 2023 versus 2022, respectively.

Sales and marketing expense increased 14% and 8% in the three and nine months ended September 30, 2023 versus 2022, respectively, driven by an increase in marketing investments in our products, including educational initiatives and programs related to the impact of opioids and postsurgical pain management and our national advocacy campaign designed to educate patients about non-opioid treatment options. In 2023, we also invested in strategic partnerships with sports organizations, such as the Ladies Professional Golf Association (LPGA) and National Football League Alumni Association (NFLA), to increase awareness of the availability and benefits of non-opioid options to manage acute and chronic pain for athletes, including postsurgical pain and knee OA. We also expanded our investment in clinician training in the use of EXPAREL and iovera° at our training facility in Tampa, as well as the opening of a second training facility in Houston, Texas in January 2023. We also announced a new grant to the ASA’s Charitable Foundation to advance the medical specialty of anesthesiology and pain medicine, facilitate best in-class clinician education and improve patient care.

General and administrative expense increased 13% and 10% in the three and nine months ended September 30, 2023 versus 2022, respectively, primarily driven by legal fees attributable to ongoing litigation. For more information, see Note 15, Commitments and Contingencies, to our condensed consolidated financial statements included herein.

Stock-based compensation decreased 3% and 4% for the three and nine months ended September 30, 2023 versus 2022, respectively, primarily due to a decrease in the number of equity awards outstanding for selling, general and administrative personnel.

Amortization of Acquired Intangible Assets

The following table provides a summary of the amortization of acquired intangible assets during the periods indicated, including percent changes (dollar amounts in thousands):

	Three Months Ended September 30,				% Increase / (Decrease)	Nine Months Ended September 30,				% Increase / (Decrease)
	2023		2022			2023		2022
Amortization of acquired intangible assets	$	14,322	$	14,322	—%	$	42,966	$	42,966	—%

As part of the Flexion Acquisition and the MyoScience Acquisition, we acquired intangible assets consisting of developed technology intangible assets and customer relationships, with estimated useful lives between 9 and 14 years. For more information, see Note 7, Goodwill and Intangible Assets, to our condensed consolidated financial statements included herein.

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Contingent Consideration Charges (Gains), Restructuring Charges and Other

The following table provides a summary of the costs related to the contingent consideration, acquisition-related charges and restructuring charges during the periods indicated, including percent changes (dollar amounts in thousands):

	Three Months Ended September 30,				% Increase / (Decrease)	Nine Months Ended September 30,				% Increase / (Decrease)
	2023		2022			2023		2022
Contingent consideration	2,793		(1,043)		N/A	(3,847)		(23,394)		(84)%
Acquisition-related charges	$	390	$	1,532	(75)%	$	1,588	$	10,162	(84)%
Restructuring charges	173		—		N/A	1,109		—		N/A
Total contingent consideration charges (gains), restructuring charges and other	$	3,356	$	489	100% +	$	(1,150)	$	(13,232)	(91)%

Total contingent consideration charges (gains), restructuring charges and other increased by more than 100% in the three months ended September 30, 2023 versus 2022 and decreased 91% in the nine months ended September 30, 2023 versus 2022.

During the three months ended September 30, 2023, we recognized contingent consideration charges (gains), restructuring charges and other of $3.4 million in charges, which were primarily driven by an increase in the contingent consideration milestones for the Flexion Acquisition due to market volatility which affects the liability’s present value.

During the nine months ended September 30, 2023, we recognized contingent consideration charges (gains), restructuring charges and other of $1.2 million in gains. These gains were primarily due to adjustments to long-term forecasts which reduced the probability of meeting the sales-based contingent consideration milestones for the Flexion Acquisition by December 31, 2030, the expiration date for achieving the milestones. The contingent consideration gain was partially offset by a decrease in the assumed discount rate that is utilized in calculating the liability’s present value, based on a significant improvement in our incremental borrowing rate. Partially offsetting these gains were acquisition-related charges primarily related to vacant and underutilized Flexion leases. In addition, in June 2023, we implemented a restructuring plan in an effort to improve our operational efficiencies and recognized one-time employee termination benefits through a reduction of headcount.

During the three months ended September 30, 2022, we recognized contingent consideration charges (gains), restructuring charges and other of $0.5 million in charges. These charges are primarily related to severance and other employee related costs, legal and other professional fees, third-party services and other one-time charges associated with the Flexion Acquisition, which were partially offset by gains from changes in the fair value of contingent consideration related to the Flexion Acquisition and MyoScience Acquisition.

During the nine months ended September 30, 2022, we recognized contingent consideration charges (gains), restructuring charges and other of $13.2 million in gains. These gains were primarily driven by reductions in acquisition contingent consideration liabilities due to adjustments to near-term forecasts for the applicable period during which the Flexion contingent consideration may be achieved under the Flexion merger agreement and due to the reduced probability of meeting the MyoScience contingent consideration milestones by December 31, 2023, the expiration date for achieving those milestones. These gains were partially offset by severance and other employee related costs, legal and other professional fees, third-party services and other one-time charges associated with the Flexion Acquisition.

For more information, see Note 9, Financial Instruments and Note 14, Contingent Consideration Charges (Gains), Restructuring Charges and Other, to our condensed consolidated financial statements included herein.

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Other Expense, Net

The following table provides information regarding other expense, net during the periods indicated, including percent changes (dollar amounts in thousands):

	Three Months Ended September 30,				% Increase / (Decrease)	Nine Months Ended September 30,				% Increase / (Decrease)
	2023		2022			2023		2022
Interest expense	$	(3,464)	$	(9,856)	(65)%	$	(16,918)	$	(28,935)	(42)%
Interest income	2,766		1,234		100% +	8,019		1,757		100%+
Loss on early extinguishment of debt	—		—		N/A	(16,926)		—		N/A
Other, net	(422)		(10,598)		(96)%	(701)		(11,369)		(94)%
Total other expense, net	$	(1,120)	(19,220)		(94)%	$	(26,526)	$	(38,547)	(31)%

Total other expense, net decreased 94% and 31% in the three and nine months ended September 30, 2023 versus 2022, respectively.

The 65% and 42% decrease in interest expense during the three and nine months ended September 30, 2023, respectively, was primarily driven by entering into the TLA Term Loan (as defined below) in March 2023 in order to retire our term loan B and related credit agreement (the “TLB Term Loan”), and, to a lesser extent, the absence of our 2.375% convertible senior notes that matured in April 2022. Retiring our TLB Term Loan is expected to significantly further reduce our 2023 full-year interest expense as our new TLA Term Loan carries approximately $140.0 million less principal and an interest rate that is 400 basis points lower than the interest rate applicable under the retired TLB Term Loan.

The increases in interest income in the three and nine months ended September 30, 2023 versus the comparable periods in 2022 were due to higher interest rates and overall investment balances.

In conjunction with the entry into the TLA Credit Agreement (as defined below), we incurred a $16.9 million loss on early extinguishment of debt recognized as a result of the retirement of $287.5 million aggregate principal of our TLB Term Loan in the nine months ended September 30, 2023. For more information, see Note 8, Debt, to our condensed consolidated financial statements included herein.

Other, net expense during the three and nine months ended September 30, 2022 included a $10.0 million impairment related to an equity investment.

Income Tax Expense

The following table provides information regarding our income tax expense during the periods indicated, including percent changes (dollar amounts in thousands):

	Three Months Ended September 30,						% Increase / (Decrease)	Nine Months Ended September 30,						% Increase / (Decrease)
	2023			2022				2023			2022
Income tax expense	$	5,743		$	2,762		100% +	$	10,896		$	5,359		100% +
Effective tax rate	35		%	133		%		39		%	17		%

The effective tax rates were 35% and 39% for the three and nine months ended September 30, 2023, respectively. The effective tax rates were 133% and 17% for the three and nine months ended September 30, 2022, respectively. Income tax expense represents the estimated annual effective tax rate applied to the year-to-date domestic operating results adjusted for certain discrete tax items.

The effective tax rate for the three and nine months ended September 30, 2023 include costs related to non-deductible stock-based compensation and non-deductible executive compensation, partially offset by credits and a fair value adjustment for the Flexion contingent consideration.

The effective tax rates for the three and nine months ended September 30, 2022 include costs related to non-deductible executive compensation, valuation allowances recorded against non-U.S. operating results and U.S. capital losses, partially offset by benefits for a first quarter milestone payment to SkyePharma Holding, Inc. (now a subsidiary of Vectura Group plc),

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 43

or Skyepharma, a fair value adjustment for Flexion contingent consideration and the impact of stock-based compensation adjustments.

Liquidity and Capital Resources

Since our inception in 2006, we have devoted most of our cash resources to manufacturing, research and development and selling, general and administrative activities related to the development and commercialization of EXPAREL. In addition, we acquired ZILRETTA as part of the Flexion Acquisition in November 2021 and iovera° as part of the MyoScience Acquisition in April 2019. We are primarily dependent on the commercial success of EXPAREL and ZILRETTA. We have financed our operations primarily with the proceeds from the sale of convertible senior notes and other debt, common stock, product sales and collaborative licensing and milestone revenue. As of September 30, 2023, we had an accumulated deficit of $131.7 million, cash and cash equivalents and available-for-sale investments of $235.2 million and working capital of $353.6 million.

We expect that our cash and available-for-sale investments on hand will be adequate to cover our short-term liquidity needs, and that we would be able to access other sources of financing should the need arise.

Summary of Cash Flows

The following table summarizes our cash flows from operating, investing and financing activities for the periods indicated (in thousands):

	Nine Months Ended September 30,
Condensed Consolidated Statements of Cash Flows Data:	2023		2022
Net cash provided by (used in):
Operating activities	$	107,065	$	103,237
Investing activities	69,167		(236,374)
Financing activities	(181,252)		(343,017)
Net decrease in cash and cash equivalents	$	(5,020)	$	(476,154)

Operating Activities

During the nine months ended September 30, 2023, net cash provided by operating activities was $107.1 million, compared to $103.2 million during the nine months ended September 30, 2022. The increase of $3.8 million was attributable to increased interest income and lower interest expense, partially offset by the payment of a $13.0 million termination fee relating to a licensing agreement.

Investing Activities

During the nine months ended September 30, 2023, net cash provided by investing activities was $69.2 million, which reflected proceeds from $89.3 million of available-for-sale investment sales (net of purchases), partially offset by purchases of fixed assets of $13.4 million for fill lines for our products and equipment for an EXPAREL capacity expansion project at our Science Center Campus in San Diego, California and purchases of equity and debt investments of $6.8 million.

During the nine months ended September 30, 2022, net cash used in investing activities was $236.4 million, which reflected $166.8 million of available-for-sale investment purchases (net of maturities), a $32.0 million contingent consideration milestone payment that had been achieved in the fourth quarter of 2021 associated with our 2007 acquisition of Pacira Pharmaceuticals, Inc. from Skyepharma, purchases of fixed assets of $24.6 million for fill lines for our products and equipment for an EXPAREL capacity expansion project at our Science Center Campus in San Diego, California and purchases of equity and debt investments of $13.0 million.

Financing Activities

During the nine months ended September 30, 2023, net cash used in financing activities was $181.3 million, which consisted of a $296.9 million repayment of TLB Term Loan principal as well as a $5.8 million prepayment penalty in connection with the retirement of the TLB Term Loan facility and $30.6 million repayments of TLA Term Loan principal, partially offset by the net proceeds from the TLA Term Loan of $149.6 million, proceeds from the exercise of stock options of $1.9 million and $1.7 million from the issuance of common stock through our ESPP. See Note 8, Debt, to our condensed consolidated financial statements included herein for further discussion on the TLA Term Loan and TLB Term Loan.

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During the nine months ended September 30, 2022, net cash used in financing activities was $343.0 million, which primarily consisted of a $192.6 million principal repayment of the 3.375% convertible senior notes due 2024 (the “Flexion 2024 Notes”) as part of a repurchase offer to the holders of the Flexion 2024 Notes that was triggered by the Flexion Acquisition, $157.0 million to settle the 2022 Notes that matured on April 1, 2022 and $18.8 million of scheduled repayments of Term Loan principal, partially offset by $23.5 million of proceeds from the exercise of stock options and $1.8 million from the issuance of common stock through our ESPP.

Debt

2028 Term Loan A Facility

On March 31, 2023, we entered into a credit agreement (the “TLA Credit Agreement”) to refinance the indebtedness outstanding under our TLB Credit Agreement (as defined and discussed below). The term loan issued under the TLA Credit Agreement (the “TLA Term Loan”) was issued at a 0.30% discount and provides for a single-advance term loan A facility in the principal amount of $150.0 million, which is secured by substantially all of our and any subsidiary guarantor’s assets and matures on March 31, 2028. We may elect to borrow either (i) alternate base rate borrowings or (ii) term benchmark borrowings or daily simple SOFR (as defined in the TLA Credit Agreement) borrowings. Each term loan borrowing which is an alternate base rate borrowing bears interest at a rate per annum equal to (i) the Alternate Base Rate (as defined in the TLA Credit Agreement), plus (ii) a spread based on our Senior Secured Net Leverage Ratio ranging from 2.00% to 2.75%. Each term loan borrowing which is a term benchmark borrowing or daily simple SOFR borrowing bears interest at a rate per annum equal to (i) the Adjusted Term SOFR Rate or Adjusted Daily Simple SOFR (as each is defined in the TLA Credit Agreement), plus (ii) a spread based on our Senior Secured Net Leverage Ratio ranging from 3.00% to 3.75%. During the nine months ended September 30, 2023, we made a scheduled principal payment of $2.8 million as well as $27.8 million of voluntary principal prepayments. Due to voluntary principal prepayments of $27.8 million made during the three months ended September 30, 2023, we are not required to make further principal payments for the remainder of 2023 and 2024. As of September 30, 2023, borrowings under the TLA Term Loan consisted entirely of term benchmark borrowings at a rate of 8.47%.

The TLA Credit Agreement requires us to, among other things, maintain (i) a Senior Secured Net Leverage Ratio (as defined in the Credit Agreement), determined as of the last day of each fiscal quarter, of no greater than 3.00 to 1.00 and (ii) a Fixed Charge Coverage Ratio (as defined in the TLA Credit Agreement), determined as of the last day of each fiscal quarter, of no less than 1.50 to 1.00. The TLA Credit Agreement also contains customary affirmative and negative covenants, financial covenants, representations and warranties, events of default and other provisions. As of September 30, 2023, we were in compliance with all financial covenants under the TLA Credit Agreement. See Note 8, Debt, to our condensed consolidated financial statements included herein for further discussion.

2026 Term Loan B Facility

In December 2021, we entered into the $375.0 million TLB Term Loan which was secured by substantially all of our and any subsidiary guarantor’s assets and was scheduled to mature on December 7, 2026, subject to certain exceptions set forth in the TLB Credit Agreement.

On March 31, 2023, we used the $149.6 million of net borrowings under the TLA Credit Agreement and cash on hand to repay the indebtedness outstanding under the TLB Credit Agreement and concurrently terminated the TLB Credit Agreement. We incurred a prepayment fee of 2.00% of the outstanding principal balance of the TLB Term Loan in connection with the termination. During the nine months ended September 30, 2023, we made a scheduled principal payment of $9.4 million and repaid the outstanding $287.5 million principal on the TLB Term Loan, which resulted in a $16.9 million loss on early extinguishment of debt. See Note 8, Debt, to our condensed consolidated financial statements included herein for further discussion.

2025 Convertible Senior Notes

In July 2020, we completed a private placement of $402.5 million in aggregate principal amount of our 0.750% convertible senior notes due 2025, or 2025 Notes, and entered into an indenture with respect to the 2025 Notes. The 2025 Notes accrue interest at a fixed rate of 0.750% per annum, payable semiannually in arrears on February 1st and August 1st of each year. The 2025 Notes mature on August 1, 2025. At September 30, 2023, the outstanding principal on the 2025 Notes was $402.5 million. See Note 8, Debt, to our condensed consolidated financial statements included herein for further discussion.

2024 Convertible Senior Notes

In November 2021, as part of the Flexion Acquisition, we assumed $201.3 million in aggregate principal amount of the Flexion 2024 Notes. The Flexion 2024 Notes have a maturity date of May 1, 2024, are unsecured, and accrue interest at a rate

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 45

of 3.375% per annum, payable semi-annually on May 1st and November 1st of each year. In January 2022, we repurchased $192.6 million aggregate principal amount of the Flexion 2024 Notes. At September 30, 2023, the outstanding principal on the Flexion 2024 Notes was $8.6 million. See Note 8, Debt, to our condensed consolidated financial statements included herein for further discussion.

Future Capital Requirements

We believe that our existing cash and cash equivalents, available-for-sale investments and cash received from product sales will be sufficient to enable us to fund our operating expenses, capital expenditure requirements and payment of the interest and principal on our TLA Term Loan, Flexion 2024 Notes and 2025 Notes (collectively, the “Notes”) through the next 12 months. Our future use of operating cash and capital requirements will depend on many forward-looking factors, including, but not limited to:

•the cost and timing of the potential milestone payments to former Flexion stockholders, which could be up to an aggregate of $372.3 million if certain regulatory and commercial milestones are met. See Note 9, Financial Instruments, to our condensed consolidated financial statements included herein for more information;

•the cost and timing of potential remaining milestone payments to former MyoScience security holders, which could be up to an aggregate of $43.0 million if certain regulatory and commercial milestones are met. See Note 9, Financial Instruments, to our condensed consolidated financial statements included herein for more information;

•the impact of global economic conditions—including the impact of inflation—on our product and material costs, supply chain, longer lead-times, an inability to secure a sufficient supply of materials, our operating expenses and our business strategy;

•the timing of and extent to which the holders of our Notes elect to convert their Notes, the timing of principal and interest payments on our TLA Term Loan and the timing and impact of increases to the variable interest rate on our TLA Term Loan borrowings in accordance with the terms of the TLA Credit Agreement;

•the costs and our ability to successfully continue to expand the commercialization of EXPAREL, ZILRETTA and iovera°, including markets outside of the U.S.;

•the cost and timing of expanding and maintaining our manufacturing facilities, including the current EXPAREL capacity expansion project at our Science Center Campus in San Diego, California (for which a prior approval supplement was submitted to the FDA in October 2023 with an anticipated PDUFA action date in February 2024) and capital projects at the Thermo Fisher site in Swindon, England;

•the cost and timing of additional strategic investments, including additional investments under existing agreements;

•the costs related to legal and regulatory matters;

•the costs of performing additional clinical trials for our products, including the additional pediatric trials required by the FDA and EMA as a condition of the approval of EXPAREL;

•the costs for the development and commercialization of other product candidates;

•the costs and timing of future payments under our employee benefit plans, including but not limited to our cash long-term incentive plan and non-qualified deferred compensation plan; and

•the extent to which we acquire or invest in products, businesses and technologies.

We may require additional debt or equity financing to meet our future operating and capital requirements. We have no committed external sources of funds, and additional equity or debt financing may not be available on acceptable terms, if at all. In particular, capital market disruptions or negative economic conditions may hinder our access to capital.

Critical Accounting Estimates

For a description of critical accounting policies that affect our significant judgments and estimates used in the preparation of our consolidated financial statements, refer to our 2022 Annual Report. There have been no significant changes to our critical accounting policies nor any recently issued accounting pronouncements that are expected to have a material impact on our financial results since December 31, 2022.

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Contractual Obligations

Except for entry into the new TLA Credit Agreement and termination of the TLB Credit Agreement as described in Note 8, Debt, to our condensed consolidated financial statements included herein, there have been no material changes in our contractual obligations relating to our indebtedness, lease obligations and purchase obligations from those reported in our 2022 Annual Report. For more information on our contractual obligations and commercial commitments, see Part II, Item 7 in our 2022 Annual Report.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The primary objective of our cash equivalents and investment activities is to preserve principal while at the same time maximizing the income that we receive from our investments without significantly increasing risk. We invest in corporate bonds, commercial paper, asset-backed securities and U.S. Treasury and other government agency notes, which are reported at fair value. These securities are subject to interest rate risk and credit risk. This means that a change in prevailing interest rates may cause the fair value of the investment to fluctuate. For example, if we hold a security that was issued with a fixed interest rate at the then-prevailing rate and the interest rate later rises, we expect that the fair value of our investment will decline. A hypothetical 100 basis point increase in interest rates would have reduced the fair value of our available-for-sale securities at September 30, 2023 by approximately $0.7 million.

The fair values of our Notes are impacted by both the fair value of our common stock and interest rate fluctuations. As of September 30, 2023, the estimated fair value of the 2025 Notes was $909 per $1,000 principal amount. See Note 8, Debt, to our condensed consolidated financial statements included herein for further discussion of our Notes, which bear interest at a fixed rate. At September 30, 2023, all $402.5 million of principal remains outstanding on the 2025 Notes and $8.6 million of principal remains outstanding on the Flexion 2024 Notes.

The TLB Term Loan provided for a single-advance term loan in the principal amount of $375.0 million and was scheduled to mature on December 7, 2026. Each term loan borrowing which was an alternate base rate borrowing bears interest at a variable rate per annum equal to the Alternate Base Rate (as defined in the TLB Term Loan Credit Agreement) subject to a 1.75% floor, plus 6.00%. Each term loan borrowing which was a term benchmark borrowing bears interest at a variable rate per annum equal to (i) the Adjusted Term SOFR rate (as defined in the TLB Term Loan Credit Agreement) subject to a 0.75% floor plus (ii) 7.00%. We repaid the outstanding principal for TLB Term Loan on March 31, 2023, therefore there were no outstanding borrowings under the TLB Term Loan as of September 30, 2023.

The TLA Term Loan provides for a single-advance term loan in the principal amount of $150.0 million and is scheduled to mature on March 31, 2028. Each term loan borrowing that is a term benchmark borrowing or daily simple SOFR borrowing bears interest at a rate per annum equal to (i) the Adjusted Term SOFR Rate or Adjusted Daily Simple SOFR (as each is defined in the TLA Credit Agreement), plus (ii) a spread based on our Senior Secured Net Leverage Ratio ranging from 3.00% to 3.75%. As of September 30, 2023, borrowings under the TLA Term Loan consisted entirely of term benchmark borrowings at a rate of 8.47%. A hypothetical 100 basis point increase in interest rates would have increased interest expense by approximately $0.3 million and $0.7 million for the three and nine months ended September 30, 2023, respectively.

As a result of the Flexion Acquisition and as discussed in more detail in Note 8, Debt, to our condensed consolidated financial statements included herein, any future conversion rights for the Flexion 2024 Notes are subject to the occurrence of any future events giving rise to such conversion rights under the indenture governing the Flexion 2024 Notes.

We have agreements with certain vendors and partners that operate in foreign jurisdictions. The more significant transactions are primarily denominated in the U.S. Dollar, subject to an annual adjustment based on changes in currency exchange rates.

Additionally, our accounts receivable are primarily concentrated with four large wholesalers of pharmaceutical products. In the event of non-performance or non-payment, there may be a material adverse impact on our financial condition, results of operations or net cash flow.

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 47

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Exchange Act, our management, including our Chief Executive Officer and Chairman and our Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. As defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, disclosure controls and procedures are controls and other procedures which are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chairman and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Based on that evaluation, our Chief Executive Officer and Chairman and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2023.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including the Chief Executive Officer and Chairman and our Chief Financial Officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 48

PART II — OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

For information related to Item 1. Legal Proceedings, refer to Note 15, Commitments and Contingencies, to our

condensed consolidated financial statements included herein.

Item 1A. RISK FACTORS

You should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in our 2022 Annual Report, which could materially affect our business, financial condition, cash flows or future results. Except as described below, there have been no material changes in our risk factors included in our 2022 Annual Report. The risks described in our 2022 Annual Report are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.

If we fail to successfully execute the transition of David Stack, our Chief Executive Officer and Chairman, we may not be able to execute our business strategy.

In September 2023, David Stack, our Chief Executive Officer and Chairman, announced that he intends to retire as Chief Executive Officer and as a member of the Board effective immediately upon the appointment of his successor as Chief Executive Officer in order to ensure a smooth transition of leadership. The Board of Directors has engaged an executive search firm to assist in a comprehensive search for the Company’s next Chief Executive Officer.

Our success depends in a large part upon the leadership of our Chief Executive Officer, which is critical to, among other things, our mission, strategic direction, culture, products and technologies. Leadership transitions can be inherently difficult to manage. An inadequate transition to a new Chief Executive Officer may cause disruption within the Company, adversely affecting our financial performance and ability to meet operational goals and strategic plans. Management turnover also inherently causes some loss of institutional knowledge, which can negatively affect strategy and execution. In addition, to the extent we experience additional management turnover, competition for top management is high and it may take months to find a candidate that meets our requirements. If we are unable to attract and retain qualified management personnel, our business could suffer. Furthermore, while we have succession plans in place and we have employment arrangements with certain key executives, these do not guarantee the services of these executives will continue to be available to us.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES

None.

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 49

Item 5. OTHER INFORMATION

Rule 10b5-1 Trading Plans

The following table shows the “Rule 10b5-1 trading arrangements” and “non-Rule 10b5-1 trading arrangements” (as each term is defined in Item 408(a) of Regulation S-K) adopted by our directors and executive officers during the quarter ended September 30, 2023. No trading arrangements were terminated by our directors and executive officers during the quarter ended September 30, 2023.

			Trading Arrangement
Name and Position	Action	Date	Rule 10b5-1*	Non-Rule 10b5-1**	Total Number of Shares to be Sold	Expiration Date
Charles A. Reinhart, III Chief Financial Officer	Adopt (1)	7/5/2023		x	To Be Determined (2)	N/A
Kristen Williams Chief Administrative Officer and Secretary	Adopt (1)	7/27/2023		x	To Be Determined (2)	N/A
Roy Winston Chief Medical Officer and Orthopedic Franchise	Adopt	9/13/2023	x		To Be Determined (2) (3)	8/9/2024

* Intended to satisfy the affirmative defense of Rule 10b5-1(c).

** Not intended to satisfy the affirmative defense of Rule 10b5-1(c).

(1) Represents an election made upon acceptance of a grant of restricted stock units made in June 2023 to sell shares to cover tax withholding obligations upon vesting.

(2) The aggregate number of shares to be sold pursuant to each trading arrangement listed above is dependent on the amount of tax withholding required upon the vesting of restricted stock units, and, therefore, is indeterminable at this time.

(3) Dr. Winston’s trading arrangement includes 11,472 long shares to be sold upon the Company’s common stock reaching a specified limit price.

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 50

Item 6. EXHIBITS

The exhibits listed below are filed or furnished as part of this report.

Exhibit Number	Description
10.1	Transition and Retirement Agreement, dated September 20, 2023, between the Company and David Stack.(1) †
31.1	Certification of Chief Executive Officer and Chairman pursuant to Rule 13a-14(a) and 15d-14(a), as amended.*
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a), as amended.*
32.1	Certification of Chief Executive Officer and Chairman and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
101	The following materials from the Quarterly Report on Form 10-Q of Pacira BioSciences, Inc. for the quarter ended September 30, 2023, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Operations; (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss); (iv) the Condensed Consolidated Statements of Stockholders’ Equity; (v) the Condensed Consolidated Statements of Cash Flows; and (vi) the Condensed Notes to Consolidated Financial Statements.*
104	Cover Page Interactive Data File (Formatted as Inline XBRL and contained in Exhibit 101).

*	Filed herewith.
**	Furnished herewith.
†	Denotes management contract or compensatory plan or arrangement.
(1)	Incorporated by reference to the Company’s Current Report on Form 8-K, filed on September 26, 2023.

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 51

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

			PACIRA BIOSCIENCES, INC. (REGISTRANT)
Date:	November 2, 2023	By:	/s/ DAVID STACK
			David Stack
			Chief Executive Officer and Chairman
			(Principal Executive Officer)
Date:	November 2, 2023	By:	/s/ CHARLES A. REINHART, III
			Charles A. Reinhart, III
			Chief Financial Officer
			(Principal Financial Officer)

Pacira BioSciences, Inc. | Q3 2023 Form 10-Q | Page 52

EX-31.1

Exhibit 31.1

CERTIFICATION

I, David Stack, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Pacira BioSciences, Inc. (the “Registrant”);

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date:	November 2, 2023	/s/ DAVID STACK
		David Stack
		Chief Executive Officer and Chairman
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Charles A. Reinhart, III, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Pacira BioSciences, Inc. (the “Registrant”);

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date:	November 2, 2023	/s/ CHARLES A. REINHART, III
		Charles A. Reinhart, III
		Chief Financial Officer
		(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATIONS OF THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned certifies that this Quarterly Report on Form 10-Q of Pacira BioSciences, Inc. for the quarter ended September 30, 2023, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in this report fairly presents, in all material respects, the financial condition and results of operations of Pacira BioSciences, Inc. at the dates and for the periods indicated.

Date:	November 2, 2023	/s/ DAVID STACK
		David Stack
		Chief Executive Officer and Chairman
		(Principal Executive Officer)

Date:	November 2, 2023	/s/ CHARLES A. REINHART, III
		Charles A. Reinhart, III
		Chief Financial Officer
		(Principal Financial Officer)

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2023	Nov. 01, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	001-35060
Entity Registrant Name	PACIRA BIOSCIENCES, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	51-0619477
Entity Address, Address Line One	5401 West Kennedy Boulevard, Suite 890
Entity Address, City or Town	Tampa
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33609
City Area Code	813
Local Phone Number	553-6680
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	PCRX
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		46,437,704
Entity Central Index Key	0001396814
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 99,119	$ 104,139
Short-term available-for-sale investments	136,069	184,512
Accounts receivable, net	96,956	98,397
Inventories, net	96,520	96,063
Prepaid expenses and other current assets	18,591	15,223
Total current assets	447,255	498,334
Noncurrent available-for-sale investments	0	37,209
Fixed assets, net	175,783	183,512
Right-of-use assets, net	63,394	70,877
Goodwill	163,243	163,243
Intangible assets, net	497,580	540,546
Deferred tax assets	151,660	160,309
Investments and other assets	35,547	27,170
Total assets	1,534,462	1,681,200
Current liabilities:
Accounts payable	16,511	15,220
Accrued expenses	59,884	89,785
Lease liabilities	8,625	9,121
Current portion of convertible senior notes, net	8,641	0
Current portion of long-term debt, net	0	33,648
Total current liabilities	93,661	147,774
Convertible senior notes, net	397,976	404,767
Long-term debt, net	117,965	251,056
Lease liabilities	57,089	64,802
Contingent consideration	24,275	28,122
Other liabilities	11,945	9,669
Total liabilities	702,911	906,190
Commitments and contingencies (Note 15)
Stockholders’ equity:
Preferred stock, par value $0.001; 5,000,000 shares authorized; none issued and outstanding at September 30, 2023 and December 31, 2022	0	0
Common stock, par value $0.001; 250,000,000 shares authorized; 46,426,836 and 45,927,790 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively	46	46
Additional paid-in capital	963,181	924,095
Accumulated deficit	(131,666)	(148,751)
Accumulated other comprehensive loss	(10)	(380)
Total stockholders’ equity	831,551	775,010
Total liabilities and stockholders’ equity	$ 1,534,462	$ 1,681,200

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	250,000,000	250,000,000
Common stock, shares issued (in shares)	46,426,836	45,927,790
Common stock, shares outstanding (in shares)	46,426,836	45,927,790

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenues:
Total revenues	$ 163,926	$ 167,466	$ 493,734	$ 494,868
Operating expenses:
Cost of goods sold	39,750	50,678	136,977	137,379
Research and development	20,830	19,405	56,794	67,292
Selling, general and administrative	67,947	61,283	203,640	190,546
Amortization of acquired intangible assets	14,322	14,322	42,966	42,966
Contingent consideration charges (gains), restructuring charges and other	3,356	489	(1,150)	(13,232)
Total operating expenses	146,205	146,177	439,227	424,951
Income from operations	17,721	21,289	54,507	69,917
Other (expense) income:
Interest income	2,766	1,234	8,019	1,757
Interest expense	(3,464)	(9,856)	(16,918)	(28,935)
Loss on early extinguishment of debt	0	0	(16,926)	0
Other, net	(422)	(10,598)	(701)	(11,369)
Total other expense, net	(1,120)	(19,220)	(26,526)	(38,547)
Income before income taxes	16,601	2,069	27,981	31,370
Income tax expense	(5,743)	(2,762)	(10,896)	(5,359)
Net income (loss)	$ 10,858	$ (693)	$ 17,085	$ 26,011
Net income (loss) per share:
Basic net income (loss) per common share (in dollars per share)	$ 0.23	$ (0.02)	$ 0.37	$ 0.57
Diluted net income (loss) per common share (in dollars per share)	$ 0.23	$ (0.02)	$ 0.37	$ 0.56
Weighted average common shares outstanding:
Basic (in shares)	46,416	45,831	46,151	45,400
Diluted (in shares)	52,067	45,831	46,343	52,220
Net product sales
Revenues:
Total revenues	$ 163,583	$ 166,560	$ 492,481	$ 492,563
Royalty revenue
Revenues:
Total revenues	$ 343	$ 906	$ 1,253	$ 2,305

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 10,858	$ (693)	$ 17,085	$ 26,011
Other comprehensive income (loss):
Net unrealized gain (loss) on investments, net of tax	146	(163)	362	(1,056)
Foreign currency translation adjustments	17	98	8	219
Total other comprehensive income (loss)	163	(65)	370	(837)
Comprehensive income (loss)	$ 11,021	$ (758)	$ 17,455	$ 25,174

XML

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Cumulative Effect, Period of Adoption, Adjustment	[1]	Common Stock	Additional Paid-In Capital	Additional Paid-In Capital Cumulative Effect, Period of Adoption, Adjustment	[1]	Accumulated Deficit	Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment	[1]	Accumulated Other Comprehensive (Loss) Income
Beginning balance (in shares) at Dec. 31, 2021				44,734,000
Balance at beginning of period at Dec. 31, 2021	$ 730,408	$ (49,233)		$ 45	$ 942,091	$ (96,468)		$ (211,895)	$ 47,235		$ 167
Increase (Decrease) in Stockholders' Equity
Exercise of stock options (in shares)				667,000
Exercise of stock options	23,498			$ 1	23,497
Vested restricted stock units (in shares)				324,000
Common stock issued under employee stock purchase plan (in shares)				37,000
Common stock issued under employee stock purchase plan	1,821				1,821
Stock-based compensation	35,415				35,415
Issuance of common stock upon conversion of 2022 convertible senior notes (in shares)				102,000
Issuance of common stock upon conversion of 2022 convertible senior notes	3,040				3,040
Other comprehensive income (loss)	(837)										(837)
Net income (loss)	26,011							26,011
Ending balance (in shares) at Sep. 30, 2022				45,864,000
Balance at ending of period at Sep. 30, 2022	770,123			$ 46	909,396			(138,649)			(670)
Beginning balance (in shares) at Jun. 30, 2022				45,802,000
Balance at beginning of period at Jun. 30, 2022	756,636			$ 46	895,151			(137,956)			(605)
Increase (Decrease) in Stockholders' Equity
Exercise of stock options (in shares)				37,000
Exercise of stock options	1,563				1,563
Vested restricted stock units (in shares)				25,000
Stock-based compensation	12,682				12,682
Other comprehensive income (loss)	(65)										(65)
Net income (loss)	(693)							(693)
Ending balance (in shares) at Sep. 30, 2022				45,864,000
Balance at ending of period at Sep. 30, 2022	770,123			$ 46	909,396			(138,649)			(670)
Beginning balance (in shares) at Dec. 31, 2022				45,928,000
Balance at beginning of period at Dec. 31, 2022	$ 775,010			$ 46	924,095			(148,751)			(380)
Increase (Decrease) in Stockholders' Equity
Exercise of stock options (in shares)	62,680			63,000
Exercise of stock options	$ 1,939				1,939
Vested restricted stock units (in shares)				386,000
Common stock issued under employee stock purchase plan (in shares)	50,634			50,000
Common stock issued under employee stock purchase plan	$ 1,672				1,672
Stock-based compensation	35,475				35,475
Other comprehensive income (loss)	370										370
Net income (loss)	17,085							17,085
Ending balance (in shares) at Sep. 30, 2023				46,427,000
Balance at ending of period at Sep. 30, 2023	831,551			$ 46	963,181			(131,666)			(10)
Beginning balance (in shares) at Jun. 30, 2023				46,409,000
Balance at beginning of period at Jun. 30, 2023	807,975			$ 46	950,626			(142,524)			(173)
Increase (Decrease) in Stockholders' Equity
Exercise of stock options (in shares)				1,000
Exercise of stock options	25				25
Vested restricted stock units (in shares)				17,000
Stock-based compensation	12,530				12,530
Other comprehensive income (loss)	163										163
Net income (loss)	10,858							10,858
Ending balance (in shares) at Sep. 30, 2023				46,427,000
Balance at ending of period at Sep. 30, 2023	$ 831,551			$ 46	$ 963,181			$ (131,666)			$ (10)

[1] Effective January 1, 2022, the Company adopted Accounting Standards Update 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) on a modified retrospective method of transition. As a result, the Company no longer separately presents in equity an embedded conversion feature for its convertible debt.

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Operating activities:
Net income	$ 17,085	$ 26,011
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred taxes	9,014	2,895
Depreciation of fixed assets and amortization of intangible assets	57,089	61,095
Amortization of debt issuance costs	2,311	2,957
Amortization of debt discount	728	2,107
Loss on early extinguishment of debt	16,926	0
Stock-based compensation	35,475	35,415
Changes in contingent consideration	(3,847)	(23,394)
Impairment of investment	0	10,000
Other losses	2,415	377
Changes in operating assets and liabilities:
Accounts receivable, net	1,440	2,847
Inventories, net	(457)	1,751
Prepaid expenses and other assets	(6,986)	(568)
Accounts payable	1,988	4,681
Accrued expenses and income taxes payable	(26,156)	(23,560)
Other liabilities	40	623
Net cash provided by operating activities	107,065	103,237
Investing activities:
Purchases of fixed assets	(13,363)	(24,584)
Purchases of available-for-sale investments	(111,682)	(319,426)
Sales of available-for-sale investments	200,970	152,636
Payment of contingent consideration	0	(32,000)
Purchases of equity and debt investments	(6,758)	(13,000)
Net cash provided by (used in) investing activities	69,167	(236,374)
Financing activities:
Proceeds from exercises of stock options	1,939	23,482
Proceeds from shares issued under employee stock purchase plan	1,672	1,820
Proceeds from Term loan A facility	149,550	0
Debt extinguishment costs	(5,750)	0
Payment of debt issuance and financing costs	(1,163)	0
Net cash used in financing activities	(181,252)	(343,017)
Net decrease in cash and cash equivalents	(5,020)	(476,154)
Cash and cash equivalents, beginning of period	104,139	585,578
Cash and cash equivalents, end of period	99,119	109,424
Supplemental cash flow information:
Cash paid for interest	24,931	23,620
Cash paid for income taxes, net of refunds	2,072	4,216
Non-cash investing and financing activities:
Issuance of common stock from conversion of 2022 convertible senior notes	0	3,040
Fixed assets included in accounts payable and accrued liabilities	1,470	5,486
Convertible Senior Notes Due 2022
Financing activities:
Repayment of convertible senior notes	0	(156,960)
Convertible Senior Notes Due 2024
Financing activities:
Repayment of convertible senior notes	0	(192,609)
Term Loan B Facility
Financing activities:
Repayment of Term loan B facility	(296,875)	(18,750)
Term Loan A Facility
Financing activities:
Repayment of Term loan B facility	$ (30,625)	$ 0

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DESCRIPTION OF BUSINESS

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

DESCRIPTION OF BUSINESS

DESCRIPTION OF BUSINESS

Pacira BioSciences, Inc. and its subsidiaries (collectively, the “Company” or “Pacira”) is the industry leader in its commitment to non-opioid pain management and providing non-opioid pain management options to as many patients as possible to redefine the role of opioids as rescue therapy only. The Company is also developing innovative interventions to address debilitating conditions involving the sympathetic nervous system, such as cardiac electrical storm, chronic pain and spasticity. The Company’s long-acting, local analgesic, EXPAREL® (bupivacaine liposome injectable suspension), was commercially launched in the United States, or U.S., in April 2012 and approved in select European countries and the United Kingdom, or U.K., in November 2021. EXPAREL utilizes the Company’s proprietary multivesicular liposome (pMVL) drug delivery technology that encapsulates drugs without altering their molecular structure, and releases them over a desired period of time. In November 2021, the Company acquired Flexion Therapeutics, Inc., or Flexion (the “Flexion Acquisition”), and added ZILRETTA® (triamcinolone acetonide extended-release injectable suspension) to its product portfolio. ZILRETTA is the first and only extended-release, intra-articular (meaning in the joint) injection indicated for the management of osteoarthritis, or OA, knee pain. In April 2019, the Company added iovera°® to its commercial offering with the acquisition of MyoScience, Inc., or MyoScience (the “MyoScience Acquisition”). The iovera° system is a handheld cryoanalgesia device used to deliver a precise, controlled application of cold temperature to targeted nerves.

Pacira is subject to risks common to companies in similar industries and stages, including, but not limited to, competition from larger companies, reliance on revenue from three products, reliance on a limited number of wholesalers, reliance on a limited number of manufacturing sites, new technological innovations, dependence on key personnel, reliance on third-party service providers and sole source suppliers, protection of proprietary technology, compliance with government regulations and risks related to cybersecurity.

The Company is managed and operated as a single business focused on the development, manufacture, marketing, distribution and sale of non-opioid pain management and regenerative health solutions. The Company is managed by a single management team, and, consistent with its organizational structure, the Chief Executive Officer—who is the Company’s chief operating decision maker—manages and allocates resources at a consolidated level. Accordingly, the Company views its business as one reportable operating segment to evaluate its performance, allocate resources, set operational targets and forecast its future financial results.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

These interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”), for interim reporting. Pursuant to these rules and regulations, certain information and footnote disclosures normally included in complete annual financial statements have been condensed or omitted. Therefore, these interim condensed consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report”).

The condensed consolidated financial statements at September 30, 2023, and for the three and nine-month periods ended September 30, 2023 and 2022, are unaudited, but include all adjustments (consisting of only normal recurring adjustments) which, in the opinion of management, are necessary to present fairly the financial information set forth herein in accordance with GAAP. The condensed consolidated balance sheet at December 31, 2022 is derived from the audited consolidated financial statements included in the Company’s 2022 Annual Report. The condensed consolidated financial statements as presented reflect certain reclassifications from previously issued financial statements to conform to the current year presentation. The accounts of wholly-owned subsidiaries are included in the condensed consolidated financial statements. Intercompany accounts and transactions have been eliminated in consolidation.

The results of operations for these interim periods are not necessarily indicative of results that may be expected for any other interim periods or for the full year.

Concentration of Major Customers

    The Company sells EXPAREL through a drop-ship program under which orders are processed through wholesalers (including AmerisourceBergen Health Corporation, Cardinal Health, Inc. and McKesson Drug Company), but shipments of the product are sent directly to individual accounts, such as hospitals, ambulatory surgery centers and individual doctors. The Company also sells EXPAREL directly to ambulatory surgery centers and physicians. The Company sells ZILRETTA primarily to specialty distributors and specialty pharmacies, who then subsequently resell ZILRETTA to physicians, clinics and certain medical centers or hospitals. The Company also contracts directly with healthcare providers and intermediaries such as Group Purchasing Organizations, or GPOs. The Company sells its bupivacaine liposome injectable suspension for veterinary use to a third-party licensee in the U.S. and sells iovera° directly to end users.

The table below includes the percentage of revenues comprised by the Company’s three largest wholesalers in each period presented:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022
Largest wholesaler	33%	31%	33%	31%
Second largest wholesaler	24%	22%	24%	23%
Third largest wholesaler	19%	22%	20%	22%
Total	76%	75%	77%	76%

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REVENUE

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

REVENUE

REVENUE

Revenue from Contracts with Customers

The Company’s net product sales consist of (i) EXPAREL in the U.S., the European Union, or E.U., and the U.K.; (ii) ZILRETTA in the U.S.; (iii) iovera° in the U.S., Canada and the E.U. and (iv) sales of its bupivacaine liposome injectable suspension for veterinary use. Royalty revenues are related to a collaborative licensing agreement from the sale of its bupivacaine liposome injectable suspension for veterinary use. The Company does not consider revenue from sources other than sales of EXPAREL and ZILRETTA to be material sources of its consolidated revenue. As such, the following disclosure is limited to revenue associated with net product sales of EXPAREL and ZILRETTA.

Net Product Sales

The Company sells EXPAREL through a drop-ship program under which orders are processed through wholesalers based on orders of the product placed by end-users, namely hospitals, ambulatory surgery centers and healthcare provider offices. EXPAREL is delivered directly to the end-user without the wholesaler ever taking physical possession of the product. The Company primarily sells ZILRETTA to specialty distributors and specialty pharmacies, who then subsequently resell ZILRETTA to physicians, clinics and certain medical centers or hospitals. The Company also contracts directly with healthcare providers and intermediaries such as GPOs. Product revenue is recognized when control of the promised goods are transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring those goods. EXPAREL and ZILRETTA revenues are recorded at the time the products are transferred to the customer.

Revenues from sales of products are recorded net of returns allowances, prompt payment discounts, service fees, government rebates, volume rebates and chargebacks. These reserves are based on estimates of the amounts earned or to be claimed on the related sales. These amounts are treated as variable consideration, estimated and recognized as a reduction of the transaction price at the time of the sale, using the most likely amount method, except for returns, which is based on the expected value method. The Company includes these estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized for such transaction will not occur, or when the uncertainty associated with the variable consideration is resolved.

Chargebacks for fees and discounts to qualified government healthcare providers represent the estimated obligations resulting from contractual commitments to sell products to qualified Department of Veteran Affairs hospitals and 340B entities at prices lower than the list prices charged to other customers. The 340B Drug Discount Program is a U.S. federal government program that requires participating drug manufacturers to provide outpatient drugs to eligible health care organizations and covered entities at reduced prices. Customers charge the Company for the difference between the product payment and the statutory selling price to the qualified entity. Reserves are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and trade receivables, net. Chargeback amounts are generally determined at the time of sale to the qualified government healthcare provider by customers, and the Company generally issues credits for such

amounts within weeks of the customer’s notification to the Company of the sale. Reserves for chargebacks consist of credits that the Company expects to issue for units that the Company expects will be sold to qualified healthcare providers, and chargebacks that customers have claimed, but for which the Company has not yet issued a credit.

The calculation for some of these items requires management to make estimates based on sales data, historical return data, contracts, statutory requirements and other related information that may become known in the future. The adequacy of these provisions is reviewed on a quarterly basis.

Accounts Receivable

The majority of accounts receivable arise from product sales and represent amounts due from wholesalers, hospitals, ambulatory surgery centers, specialty distributors, specialty pharmacies and individual physicians. Payment terms generally range from zero to four months from the date of the transaction, and accordingly, there is no significant financing component.

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in Accounting Standards Codification, or ASC, 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

At contract inception, the Company assesses the goods promised in its contracts with customers and identifies a performance obligation for each promise to transfer to the customer a good that is distinct. When identifying individual performance obligations, the Company considers all goods promised in the contract regardless of whether explicitly stated in the customer contract or implied by customary business practices. The Company’s contracts with customers require it to transfer an individual distinct product, which represents a single performance obligation. The Company’s performance obligation with respect to its product sales is satisfied at a point in time, which transfers control upon delivery of EXPAREL and ZILRETTA to its customers. The Company considers control to have transferred upon delivery because the customer has legal title to the asset, physical possession of the asset has been transferred, the customer has significant risks and rewards of ownership of the asset and the Company has a present right to payment at that time.

Disaggregated Revenue

The following table represents disaggregated net product sales in the periods presented as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net product sales:
EXPAREL	$	128,667	$	132,642	$	394,202	$	398,854
ZILRETTA	28,798		26,494		82,393		77,546
iovera°	5,260		4,467		13,645		10,694
Bupivacaine liposome injectable suspension	858		2,957		2,241		5,469
Total net product sales	$	163,583	$	166,560	$	492,481	$	492,563

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INVENTORIES

9 Months Ended

Sep. 30, 2023

Inventory Disclosure [Abstract]

INVENTORIES

INVENTORIES

The components of inventories, net are as follows (in thousands):

	September 30,		December 31,
	2023		2022
Raw materials	$	49,196	$	39,810
Work-in-process	23,765		28,853
Finished goods	23,559		27,400
Total	$	96,520	$	96,063

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FIXED ASSETS

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

FIXED ASSETS

FIXED ASSETS

Fixed assets, net, summarized by major category, consist of the following (in thousands):

	September 30,		December 31,
	2023		2022
Machinery and equipment	$	120,481	$	118,684
Leasehold improvements	61,508		61,302
Computer equipment and software	16,242		15,360
Office furniture and equipment	2,543		2,420
Construction in progress	106,383		103,226
Total	307,157		300,992
Less: accumulated depreciation	(131,374)		(117,480)
Fixed assets, net	$	175,783	$	183,512

For the three months ended September 30, 2023 and 2022, depreciation expense was $4.1 million and $5.8 million, respectively. For the three months ended September 30, 2023 and 2022, there was $0.7 million and $1.1 million of capitalized interest on the construction of manufacturing sites, respectively.

For the nine months ended September 30, 2023 and 2022, depreciation expense was $14.1 million and $18.0 million, respectively. For the nine months ended September 30, 2023 and 2022, there was $2.8 million and $2.9 million of capitalized interest on the construction of manufacturing sites, respectively.

At September 30, 2023 and December 31, 2022, total fixed assets, net includes manufacturing process equipment and leasehold improvements located in Europe in the amount of $38.3 million and $44.7 million, respectively.

As of September 30, 2023 and December 31, 2022, the Company had asset retirement obligations of $4.0 million and $3.3 million, respectively, included in accrued expenses and other liabilities on its condensed consolidated balance sheets, for costs associated with returning leased spaces to their original condition upon the termination of certain of its lease agreements.

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LEASES

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

LEASES

LEASES

The Company leases all of its facilities, including its EXPAREL and iovera° handpiece manufacturing facility at its Science Center Campus in San Diego, California. The Company also has two embedded leases with Thermo Fisher Scientific Pharma Services for the use of their manufacturing facility in Swindon, England for the production of EXPAREL and ZILRETTA. A portion of the associated monthly base fees has been allocated to the lease components based on a relative fair value basis.

Since July 2022 and February 2023, the Company has been recognizing sublease income for laboratory space leased in Woburn, Massachusetts and a portion of office space leased in Burlington, Massachusetts, respectively, from leases that were assumed as part of the Flexion Acquisition.

During the third quarter of 2023, the Company partially exited its Burlington, Massachusetts office space lease that had been assumed as part of the Flexion Acquisition through a one-time termination fee of $0.8 million, which released its obligation of $1.6 million in future cash payments for the respective proportion of square footage exited. The partial lease termination resulted in a nominal gain which was recorded within contingent consideration charges (gains), restructuring charges and other in the condensed consolidated statements of operations.

The operating lease costs for the facilities include lease and non-lease components, such as common area maintenance and other common operating expenses, along with executory costs such as insurance and real estate taxes. Total operating lease expense, net is as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Fixed lease costs	$	3,559	$	3,440	$	10,818	$	10,509
Variable lease costs	499		540		1,444		1,520
Sublease income	(167)		(169)		(489)		(169)
Total	$	3,891	$	3,811	$	11,773	$	11,860

Supplemental cash flow information related to operating leases is as follows (in thousands):

	Nine Months Ended
	September 30,
	2023		2022
Cash paid for operating lease liabilities, net of lease incentives	$	11,055	$	9,922

The Company has elected to net the amortization of the right-of-use asset and the reduction of the lease liability principal in other liabilities in the condensed consolidated statements of cash flows.

The Company has measured its operating lease liabilities at an estimated discount rate at which it could borrow on a collateralized basis over the remaining term for each operating lease. The weighted average remaining lease terms and the weighted average discount rates are summarized as follows:

	September 30,
	2023		2022
Weighted average remaining lease term	6.26 years		7.11 years
Weighted average discount rate	7.03	%	6.95	%

Maturities of the Company’s operating lease liabilities are as follows (in thousands):

Year	Aggregate Minimum Payments Due
2023 (remaining three months)	$	3,249
2024	13,038
2025	12,775
2026	12,814
2027	12,587
Thereafter	27,351
Total future lease payments	81,814
Less: imputed interest	(16,100)
Total operating lease liabilities	$	65,714

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GOODWILL AND INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

Goodwill

The Company’s goodwill results from the acquisition of Pacira Pharmaceuticals, Inc. (the Company’s California operating subsidiary) from SkyePharma Holding, Inc., or Skyepharma, (now a subsidiary of Vectura Group plc) in 2007 (the “Skyepharma Acquisition”), the MyoScience Acquisition in 2019 and the Flexion Acquisition in 2021. The balance at each of September 30, 2023 and December 31, 2022 was $163.2 million.

The Skyepharma Acquisition occurred in March 2007, prior to the requirements to record contingent consideration at fair value under ASC 805-30. In connection with the Skyepharma Acquisition, the Company agreed to certain milestone payments for DepoBupivacaine products, including EXPAREL. The final Skyepharma milestone payment of $32.0 million when annual net sales collected reached $500.0 million was achieved in the fourth quarter of 2021 and paid during the first quarter of 2022.

Intangible Assets

Intangible assets, net, consists of the in-process research and development, or IPR&D, and developed technology from the Flexion Acquisition and developed technology and customer relationships from the MyoScience Acquisition and are summarized as follows (dollar amounts in thousands):

September 30, 2023	Gross Carrying Value		Accumulated Amortization		Intangible Assets, Net		Weighted-Average Useful Lives
Developed technologies	$	590,000	$	(127,336)	$	462,664	10 years, 5 months
Customer relationships	90		(40)		50		10 years
Total finite-lived intangible assets, net	590,090		(127,376)		462,714
Acquired IPR&D	34,866		—		34,866
Total intangible assets, net	$	624,956	$	(127,376)	$	497,580
December 31, 2022	Gross Carrying Value		Accumulated Amortization		Intangible Assets, Net		Weighted-Average Useful Lives
Developed technologies	$	590,000	$	(84,376)	$	505,624	10 years, 5 months
Customer relationships	90		(34)		56		10 years
Total finite-lived intangible assets, net	590,090		(84,410)		505,680
Acquired IPR&D	34,866		—		34,866
Total intangible assets, net	$	624,956	$	(84,410)	$	540,546

Amortization expense on intangible assets was $14.3 million for both the three months ended September 30, 2023 and 2022 and $43.0 million for both the nine months ended September 30, 2023 and 2022.

Assuming no changes in the gross carrying amount of these intangible assets, the future estimated amortization expense on the finite-lived intangible assets will be $14.3 million for the remaining three months of 2023, $57.3 million each year from 2024 to 2030, $37.4 million in 2031, $7.9 million in 2032 and $2.2 million in 2033.

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DEBT

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

DEBT

DEBT

The carrying value of the Company’s outstanding debt is summarized as follows (in thousands):

	September 30,		December 31,
	2023		2022
Term loan A facility maturing March 2028	$	117,965	$	—
Term loan B facility maturing December 2026 (1)	—		284,704
0.750% Convertible senior notes due August 2025	397,976		396,126
3.375% Convertible senior notes due May 2024	8,641		8,641
Total	$	524,582	$	689,471

(1) The TLB Term Loan (as defined below) was refinanced on March 31, 2023 as discussed below.

2028 Term Loan A Facility

On March 31, 2023, the Company entered into a credit agreement (the “TLA Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent, and certain lenders, to refinance the indebtedness outstanding under the Company’s TLB Credit Agreement (as defined and discussed below). The term loan issued under the TLA Credit Agreement (the “TLA Term Loan”) was issued at a 0.30% discount and provides for a single-advance term loan A facility in the principal amount of $150.0 million, which is secured by substantially all of the Company’s and any subsidiary guarantor’s assets. Subject to certain conditions, the Company may, at any time, on one or more occasion, add one or more new classes of term facilities and/or increase the principal amount of the loans of any existing class by requesting one or more incremental term facilities. The net proceeds of the TLA Term Loan were approximately $149.6 million after deducting an original issue discount of $0.4 million.

The total debt composition of the TLA Term Loan is as follows (in thousands):

	September 30,
	2023
Term loan A facility maturing March 2028	$	119,375
Deferred financing costs	(1,013)
Discount on debt	(397)
Total debt, net of debt discount and deferred financing costs	$	117,965

The TLA Term Loan matures on March 31, 2028 and the TLA Credit Agreement requires quarterly repayments of principal in the amount of $2.8 million which commenced on June 30, 2023, increasing to $3.8 million commencing March 31, 2025, with a remaining balloon payment of approximately $85.3 million due at maturity. Due to voluntary principal prepayments of $27.8 million made during the three months ended September 30, 2023, the Company is not required to make further principal payments for the remainder of 2023 and 2024.

The TLA Credit Agreement requires the Company to, among other things, maintain (i) a Senior Secured Net Leverage Ratio (as defined in the TLA Credit Agreement), determined as of the last day of each fiscal quarter, of no greater than 3.00 to 1.00 and (ii) a Fixed Charge Coverage Ratio (as defined in the Credit Agreement), determined as of the last day of each fiscal quarter, of no less than 1.50 to 1.00. The TLA Credit Agreement also contains customary affirmative and negative covenants, financial covenants, representations and warranties, events of default and other provisions. As of September 30, 2023, the Company was in compliance with all financial covenants under the TLA Credit Agreement.

The Company may elect to borrow either (i) alternate base rate borrowings or (ii) term benchmark borrowings or daily simple SOFR (as defined in the TLA Credit Agreement) borrowings. Each term loan borrowing that is an alternate base rate borrowing bears interest at a rate per annum equal to (i) the Alternate Base Rate (as defined in the TLA Credit Agreement), plus (ii) a spread based on the Company’s Senior Secured Net Leverage Ratio ranging from 2.00% to 2.75%. Each term loan borrowing that is a term benchmark borrowing or daily simple SOFR borrowing bears interest at a rate per annum equal to (i) the Adjusted Term SOFR Rate or Adjusted Daily Simple SOFR (as each is defined in the Credit Agreement), plus (ii) a spread based on the Company’s Senior Secured Net Leverage Ratio ranging from 3.00% to 3.75%. During the nine months ended September 30, 2023, the Company made a scheduled principal payment of $2.8 million as well as $27.8 million of voluntary principal prepayments. As of September 30, 2023, borrowings under the TLA Term Loan consisted entirely of term benchmark borrowings at a rate of 8.47%.

2026 Term Loan B Facility

In December 2021, the Company entered into a term loan credit agreement (the “TLB Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent and the initial lender. The term loan issued under the Credit Agreement (the “TLB Term Loan”) was issued at a 3.00% discount and allowed for a single-advance term loan B facility in the principal amount of $375.0 million, which was secured by substantially all of the Company’s and each subsidiary guarantor’s assets. The net proceeds of the TLB Term Loan were approximately $363.8 million after deducting an original issue discount of $11.2 million.

On March 31, 2023, the Company used the $149.6 million of net borrowings under the TLA Credit Agreement and cash on hand to repay the indebtedness outstanding under the TLB Credit Agreement and concurrently terminated the TLB Credit Agreement. The Company incurred a prepayment fee of 2.00% of the outstanding principal balance of the TLB Term Loan in connection with the termination.

The total debt composition of the TLB Term Loan was as follows (in thousands):

	September 30,		December 31,
	2023		2022
Term loan B facility maturing December 2026	$	—	$	296,875
Deferred financing costs	—		(3,919)
Discount on debt	—		(8,252)
Total debt, net of debt discount and deferred financing costs	$	—	$	284,704

During the nine months ended September 30, 2023, the Company made a scheduled principal payment of $9.4 million and repaid the outstanding $287.5 million principal on the TLB Term Loan, which resulted in a $16.9 million loss on early extinguishment of debt.

Convertible Senior Notes Due 2025

In July 2020, the Company completed a private placement of $402.5 million in aggregate principal amount of its 0.750% convertible senior notes due 2025, or 2025 Notes, and entered into an indenture with Computershare Corporate Trust, N.A. (formerly Wells Fargo Bank, N.A.), or 2025 Indenture, with respect to the 2025 Notes. The 2025 Notes accrue interest at a fixed rate of 0.750% per year, payable semiannually in arrears on February 1st and August 1st of each year. The 2025 Notes mature on August 1, 2025.

The total debt composition of the 2025 Notes is as follows (in thousands):

	September 30,		December 31,
	2023		2022
0.750% convertible senior notes due August 2025	$	402,500	$	402,500
Deferred financing costs	(4,524)		(6,374)
Total debt, net of debt discount and deferred financing costs	$	397,976	$	396,126

The net proceeds from the issuance of the 2025 Notes were approximately $390.0 million, after deducting commissions and the offering expenses paid by the Company. A portion of the net proceeds from the 2025 Notes was used by the Company to repurchase $185.0 million in aggregate principal amount of its then-outstanding 2.375% convertible senior notes due 2022 in privately-negotiated transactions for a total of $211.1 million of cash (including accrued interest).

Holders may convert the 2025 Notes at any time prior to the close of business on the business day immediately preceding February 3, 2025, only if certain circumstances are met, including if during the previous calendar quarter, the last reported sales price of the Company’s common stock was greater than 130% of the conversion price then applicable for at least 20 out of the last 30 consecutive trading days of the quarter. During the quarter ended September 30, 2023, the conditions for conversion were not met.

On or after February 3, 2025, until the close of business on the second scheduled trading day immediately preceding August 1, 2025, holders may convert their 2025 Notes at any time.

Upon conversion, holders will receive the principal amount of their 2025 Notes and any excess conversion value, calculated based on the per share volume-weighted average price for each of the 40 consecutive trading days during the observation period (as more fully described in the 2025 Indenture). For both the principal and excess conversion value, holders may receive cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s option. The initial conversion rate for the 2025 Notes is 13.9324 shares of common stock per $1,000

principal amount, which is equivalent to an initial conversion price of $71.78 per share of the Company’s common stock. The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. The initial conversion price of the 2025 Notes represents a premium of approximately 32.5% to the closing sale price of $54.17 per share of the Company’s common stock on the Nasdaq Global Select Market on July 7, 2020, the date that the Company priced the private offering of the 2025 Notes.

As of September 30, 2023, the 2025 Notes had a market price of $909 per $1,000 principal amount. In the event of conversion, holders would forgo all future interest payments, any unpaid accrued interest and the possibility of further stock price appreciation. Upon the receipt of conversion requests, the settlement of the 2025 Notes will be paid pursuant to the terms of the 2025 Indenture. In the event that all of the 2025 Notes are converted, the Company would be required to repay the $402.5 million in principal value and any conversion premium in any combination of cash and shares of its common stock (at the Company’s option).

Beginning on August 1, 2023 (but, in the case of a redemption of less than all of the outstanding 2025 Notes, no later than the 40th scheduled trading day immediately before the maturity date), the Company may redeem for cash all or part of the 2025 Notes if the last reported sale price (as defined in the 2025 Indenture) of the Company’s common stock has been at least 130% of the conversion price then in effect for (i) each of at least 20 trading days (whether or not consecutive) during any 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related notice of redemption and (ii) the trading day immediately before the date the Company sends such notice. The redemption price will equal the sum of (i) 100% of the principal amount of the 2025 Notes being redeemed, plus (ii) accrued and unpaid interest, including additional interest, if any, to, but excluding, the redemption date. In addition, calling the 2025 Notes for redemption will constitute a “make-whole fundamental change” (as defined in the 2025 Indenture) and will, in certain circumstances, increase the conversion rate applicable to the conversion of such notes if it is converted in connection with the redemption. No sinking fund is provided for the 2025 Notes.

While the 2025 Notes are currently classified on the Company’s condensed consolidated balance sheet at September 30, 2023 as long-term debt, the future convertibility and resulting balance sheet classification of this liability is monitored at each quarterly reporting date and is analyzed dependent upon market prices of the Company’s common stock during the prescribed measurement periods. In the event that the holders of the 2025 Notes have the election to convert the 2025 Notes at any time during the prescribed measurement period, the 2025 Notes would then be considered a current obligation and classified as such.

Convertible Senior Notes Due 2024 Assumed from the Flexion Acquisition

Prior to the Flexion Acquisition, on May 2, 2017, Flexion issued an aggregate of $201.3 million principal amount of 3.375% convertible senior notes due 2024 (the “Flexion 2024 Notes”), pursuant to the indenture, dated as of May 2, 2017 (the “Original Flexion Indenture”), between Flexion and Computershare Corporate Trust, N.A. (formerly Wells Fargo Bank, N.A.), as trustee (the “Flexion Trustee”), as supplemented by the First Supplemental Indenture, dated as of November 19, 2021, between Flexion and the Flexion Trustee (the “First Supplemental Flexion Indenture” and, together with the Original Flexion Indenture, the “Flexion Indenture”). The Flexion 2024 Notes mature on May 1, 2024, are unsecured and accrue interest at a rate of 3.375% per annum, payable semi-annually on May 1st and November 1st of each year. Upon the Flexion Acquisition, the principal was assumed and recorded at fair value by the Company.

As a result of the Flexion Acquisition, and in connection with a Fundamental Change Company Notice and Offer to Purchase (the “Notice”) to the holders of the Flexion 2024 Notes in accordance with the Flexion Indenture, holders of the Flexion 2024 Notes became entitled to certain Flexion Acquisition-related conversion and repurchase rights. On December 6, 2021, as a result of the Flexion Acquisition and in accordance with the Flexion Indenture, the Company offered to repurchase for cash all of the outstanding Flexion 2024 Notes, at a repurchase price in cash equal to 100% of the principal amount of the Flexion 2024 Notes being repurchased, plus accrued and unpaid interest thereon to, but excluding, January 7, 2022, subject to the terms and conditions set forth therein. Any holder that did not exercise its repurchase right in accordance with the terms of the Notice retained the conversion rights associated with such holder’s Flexion 2024 Notes under the Flexion Indenture as well as the right to receive interest payments on the Flexion 2024 Notes.

On January 7, 2022, following the expiration of the offer to purchase, the Company accepted the $192.6 million aggregate principal amount of Flexion 2024 Notes that were validly tendered (and not validly withdrawn). No Flexion 2024 Notes were converted in connection with the Notice. At September 30, 2023, the remaining principal outstanding is $8.6 million.

Convertible Senior Notes Due 2022

In March 2017, the Company completed a private placement of $345.0 million in aggregate principal amount of 2.375% convertible senior notes due 2022, or 2022 Notes, and entered into an indenture with respect to the 2022 Notes. On April 1, 2022, the 2022 Notes matured and the Company settled the remaining outstanding principal balance of $160.0 million and a conversion premium of $4.8 million through a cash payment of $156.9 million and the issuance of 101,521 shares of the Company’s common stock, which increased additional paid-in capital by $3.0 million.

Interest Expense

The following table sets forth the total interest expense recognized in the periods presented (dollar amounts in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Contractual interest expense	$	3,471		$	9,343		$	16,670		$	26,724
Amortization of debt issuance costs	683			903			2,311			2,956
Amortization of debt discount	25			695			728			2,107
Capitalized interest and other (Note 5)	(715)			(1,085)			(2,791)			(2,852)
Total	$	3,464		$	9,856		$	16,918		$	28,935
Effective interest rate on total debt	2.98		%	5.42		%	3.96		%	5.66		%

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FINANCIAL INSTRUMENTS

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

FINANCIAL INSTRUMENTS

FINANCIAL INSTRUMENTS

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or be paid to transfer a liability in the principal or most advantageous market in an orderly transaction. To increase consistency and comparability in fair value measurements, the Financial Accounting Standards Board (FASB) established a three-level hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of fair value measurements are:

•Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

•Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

•Level 3: Unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

The carrying value of financial instruments including cash and cash equivalents, accounts receivable and accounts payable approximate their respective fair values due to the short-term nature of these items. The fair value of the Company’s convertible senior notes are calculated utilizing market quotations from an over-the-counter trading market for these notes (Level 2). The fair value of the Company’s acquisition-related contingent consideration is reported at fair value on a recurring basis (Level 3). The carrying amounts of equity investments and convertible notes receivable without readily determinable fair values have not been adjusted for either an impairment or upward or downward adjustments based on observable transactions.

At September 30, 2023, the carrying values and fair values of the following financial assets and liabilities were as follows (in thousands):

	Carrying Value		Fair Value Measurements Using
			Level 1		Level 2		Level 3
Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis:
Financial Assets:
Equity investments	$	15,877	$	—	$	—	$	15,877
Convertible notes receivable	$	11,938	$	—	$	—	$	11,938
Financial Liabilities:
Acquisition-related contingent consideration	$	24,275	$	—	$	—	$	24,275
Financial Liabilities Measured at Amortized Cost:
Term loan A facility due March 2028	$	117,965	$	—	$	118,778	$	—
0.750% convertible senior notes due 2025 (1)	$	397,976	$	—	$	365,772	$	—
3.375% convertible senior notes due 2024	$	8,641	$	—	$	8,641	$	—

(1) The closing price of the Company’s common stock as reported on the Nasdaq Global Select Market was $30.68 per share at September 30, 2023 compared to a conversion price of $71.78 per share. At September 30, 2023, as the conversion price was above the stock price, the requirements for conversion have not been met. The maximum conversion premium that could have been due on the 2025 Notes is 5.6 million shares of the Company’s common stock, which assumes no increase in the conversion rate for certain corporate events.

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

Equity and Convertible Note Investments

The Company holds strategic investments in clinical and preclinical stage privately-held biotechnology companies in the form of equity and convertible note investments. The following investments have no readily determinable fair value and are recorded at cost minus impairment, if any, plus or minus observable price changes of identical or similar investments (in thousands):

	Equity Investments		Convertible Notes Receivable		Total
Balance at December 31, 2021	$	14,127	$	4,132	$	18,259
Purchases	11,750		1,250		13,000
Impairment	(10,000)		—		(10,000)
Foreign currency adjustments	—		(67)		(67)
Balance at December 31, 2022	15,877		5,315		21,192
Purchases	—		6,758		6,758
Foreign currency adjustments	—		(135)		(135)
Balance at September 30, 2023	$	15,877	$	11,938	$	27,815

Acquisition-Related Contingent Consideration

The Company has recognized contingent consideration related to the Flexion Acquisition and the MyoScience Acquisition in the amount of $24.3 million and $28.1 million as of September 30, 2023 and December 31, 2022, respectively. For more information, see Note 14, Contingent Consideration Charges (Gains), Restructuring Charges and Other.

The Company’s contingent consideration obligations are recorded at their estimated fair values and are revalued each reporting period if and until the related contingencies are resolved. The Company has measured the fair value of its contingent consideration using a probability-weighted discounted cash flow approach that is based on unobservable inputs and a Monte Carlo simulation. These inputs include, as applicable, estimated probabilities and the timing of achieving specified commercial and regulatory milestones, estimated forecasts of revenue and costs and the discount rates used to calculate the present value of estimated future payments. Significant changes may increase or decrease the probabilities of achieving the related commercial and regulatory events, shorten or lengthen the time required to achieve such events, or increase or decrease estimated forecasts.

In November 2021, the Company completed the Flexion Acquisition, which provided for contingent consideration related to contingent value rights that were issued to Flexion shareholders and certain equity award holders which could aggregate up to a total of $372.3 million if certain regulatory and commercial milestones are met. The aggregate amount was initially $425.5 million prior to the Company’s September 2022 decision to formally discontinue further development of Flexion’s product candidate, PCRX-301. The Company’s obligation to make milestone payments is limited to those milestones achieved through December 31, 2030, and are to be paid within 60 days of the end of the fiscal quarter of achievement. During the three months ended September 30, 2023, the Company recorded charges of $2.8 million primarily due to market volatility which affects the liability’s present value. During the nine months ended September 30, 2023, the Company recorded gains of $3.8 million due to adjustments to long-term forecasts which reduced the probability of meeting the sales-based contingent consideration milestones by December 31, 2030, the expiration date for achieving the milestones. The gains recognized during the nine months ended September 30, 2023 were partially offset by a decrease in the assumed discount rate that is utilized in calculating the liability’s present value, based on a significant improvement in the Company’s incremental borrowing rate resulting from the TLA Credit Agreement entered into in March 2023. During the three and nine months ended September 30, 2022, the Company recorded gains of $0.5 million and $13.8 million, respectively, primarily due to adjustments to near-term forecasts for the earnout period of the contingent consideration. These adjustments were recorded as contingent consideration charges (gains), restructuring charges and other in the condensed consolidated statements of operations. At September 30, 2023, the weighted average discount rate was 10.6% and the probability of payment for the achievement of the remaining regulatory milestone by the expiration date was 12.5%. As of September 30, 2023 and December 31, 2022, a contingent consideration liability related to the Flexion Acquisition was recognized in the amount of $24.3 million and $28.1 million, respectively.

In April 2019, the Company completed the MyoScience Acquisition pursuant to the terms of an Agreement and Plan of Merger, which provided for contingent milestone payments of up to an aggregate of $100.0 million upon the achievement of certain regulatory and commercial milestones. The Company’s obligation to make milestone payments is limited to those milestones achieved through December 31, 2023, and are to be paid within 60 days of the end of the fiscal quarter of achievement. As of September 30, 2023, the maximum potential remaining milestone payments to be paid are $43.0 million. At September 30, 2023, the probability of success for the regulatory milestone that has not yet been met was assessed as zero. As of September 30, 2023 and December 31, 2022, a contingent consideration liability related to the MyoScience Acquisition has been assessed as zero. During the three and nine months ended September 30, 2022, the Company recognized contingent consideration gains of $0.5 million and $9.6 million, respectively, due to the reduced probability of meeting the contingent consideration milestones by December 31, 2023, the expiration date for achieving the milestones.

The following table includes the key assumptions used in the valuation of the Company’s contingent consideration:

Assumption	Flexion Ranges Utilized as of September 30, 2023
Discount rates	10.1% to 11.1%
Probabilities of payment for regulatory milestones	0% to 12.5%
Projected year of payment for regulatory and commercial milestones	2030

The change in the Company’s contingent consideration recorded at fair value using Level 3 measurements is as follows (in thousands):

	Contingent Consideration Fair Value
Balance at December 31, 2021	$	57,598
Fair value adjustments and accretion	(29,476)
Balance at December 31, 2022	28,122
Fair value adjustments and accretion	(3,847)
Balance at September 30, 2023	$	24,275

Available-for-Sale Investments

Short-term investments consist of asset-backed securities collateralized by credit card receivables, investment grade commercial paper and corporate, federal agency and government bonds with maturities greater than three months, but less than one year. Noncurrent investments consist of federal agency bonds and government bonds with maturities greater than one year but less than three years. Net unrealized gains and losses (excluding credit losses, if any) from the Company’s short-term investments are reported in other comprehensive income (loss). At September 30, 2023 and December 31, 2022, all of the

Company’s short-term and noncurrent investments are classified as available-for-sale investments and are determined to be Level 2 instruments, which are measured at fair value using standard industry models with observable inputs. The fair value of the commercial paper is measured based on a standard industry model that uses the three-month U.S. Treasury bill rate as an observable input. The fair value of the asset-backed securities and corporate bonds is principally measured or corroborated by trade data for identical issues in which related trading activity is not sufficiently frequent to be considered a Level 1 input or that of comparable securities. At the time of purchase, all available-for-sale investments had an “A” or better rating by Standard & Poor’s. 

The following summarizes the Company’s short-term and noncurrent available-for-sale investments at September 30, 2023 and December 31, 2022 (in thousands):

September 30, 2023 Investments	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value (Level 2)
Current:
Asset-backed securities	$	15,473	$	—	$	(32)	$	15,441
Commercial paper	65,781		1		(110)		65,672
U.S. federal agency bonds	40,332		—		(116)		40,216
U.S. government bonds	14,797		—		(57)		14,740
Total	$	136,383	$	1	$	(315)	$	136,069

December 31, 2022 Investments	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value (Level 2)
Current:
Asset-backed securities	$	6,836	$	—	$	(3)	$	6,833
Commercial paper	134,423		23		(386)		134,060
U.S. federal agency bonds	41,971		—		(337)		41,634
U.S. government bonds	2,003		—		(18)		1,985
Subtotal	$	185,233	$	23	$	(744)	$	184,512
Noncurrent:
U.S. federal agency bonds	22,783		2		(66)		22,719
U.S. government bonds	14,499		—		(9)		14,490
Subtotal	37,282		2		(75)		37,209
Total	$	222,515	$	25	$	(819)	$	221,721

At September 30, 2023, there were no investments available for sale that were materially less than their amortized cost.

The Company elects to recognize its interest receivable separate from its available-for-sale investments. At September 30, 2023 and December 31, 2022, the interest receivable from its available-for-sale investments recognized in prepaid expenses and other current assets was $0.4 million and $0.8 million, respectively.

Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term and long-term available-for-sale investments and accounts receivable. The Company maintains its cash and cash equivalents with high-credit quality financial institutions. Such amounts may exceed federally-insured limits.

 As of September 30, 2023, three wholesalers each accounted for over 10% of the Company’s accounts receivable, at 37%, 18% and 15%. At December 31, 2022, three wholesalers each accounted for over 10% of the Company’s accounts receivable, at 34%, 19% and 18%. For additional information regarding the Company’s wholesalers, see Note 2, Summary of Significant Accounting Policies. EXPAREL and ZILRETTA revenues are primarily derived from major wholesalers and specialty distributors that generally have significant cash resources. The Company performs ongoing credit evaluations of its customers as warranted and generally does not require collateral. Allowances for credit losses on the Company’s accounts receivable are maintained based on historical payment patterns, current and estimated future economic conditions, aging of accounts receivable and its write-off history. As of September 30, 2023 and December 31, 2022, the Company did not deem any allowances for credit losses on its accounts receivable necessary.

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STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2023

Stockholders' Equity Note [Abstract]

STOCKHOLDERS' EQUITY

STOCKHOLDERS’ EQUITY

Accumulated Other Comprehensive Loss

The following tables illustrate the changes in the balances of the Company’s accumulated other comprehensive loss for the periods presented (in thousands):

	Net Unrealized Gain (Loss) From Available-For-Sale Investments		Unrealized Foreign Currency Translation		Accumulated Other Comprehensive Loss
Balance at December 31, 2022	$	(523)	$	143	$	(380)
Net unrealized gain on investments, net of tax (1)	362		—		362
Foreign currency translation adjustments	—		8		8
Balance at September 30, 2023	$	(161)	$	151	$	(10)

	Net Unrealized (Loss) Gain From Available-For-Sale Investments		Unrealized Foreign Currency Translation		Accumulated Other Comprehensive (Loss) Income
Balance at December 31, 2021	$	139	$	28	$	167
Net unrealized loss on investments, net of tax (1)	(1,056)		—		(1,056)
Foreign currency translation adjustments	—		219		219
Balance at September 30, 2022	$	(917)	$	247	$	(670)

(1) Net of a $0.2 million tax expense and $0.3 million tax benefit for the nine months ended September 30, 2023 and 2022, respectively.

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STOCK PLANS

9 Months Ended

Sep. 30, 2023

Stockholders' Equity Note [Abstract]

STOCK PLANS

STOCK PLANS

Stock Incentive Plans

The Company’s Amended and Restated 2011 Stock Incentive Plan, or 2011 Plan, was originally adopted by its board of directors and approved by its stockholders in June 2011 and was amended and restated in June 2014, June 2016, June 2019, June 2021 and June 2023. In June 2023, the Company’s stockholders approved the amendment and restatement which increased the number of shares of common stock authorized for issuance as equity awards under the 2011 Plan by 3,300,000 shares. The 2011 Plan allows the granting of incentive stock options, non-statutory stock options, restricted stock units and other stock-based awards.

Stock-Based Compensation

The Company recognized stock-based compensation expense in the periods presented as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Cost of goods sold	$	1,272	$	1,599	$	4,432	$	4,429
Research and development	2,220		1,783		5,817		4,761
Selling, general and administrative	9,038		9,300		25,226		26,225
Total	$	12,530	$	12,682	$	35,475	$	35,415
Stock-based compensation from:
Stock options	$	5,957	$	6,711	$	18,163	$	20,038
Restricted stock units	6,373		5,758		16,592		14,588
Employee stock purchase plan	200		213		720		789
Total	$	12,530	$	12,682	$	35,475	$	35,415

Equity Awards

The following tables contain information about the Company’s stock option and restricted stock unit, or RSU, activity for the nine months ended September 30, 2023:

Stock Options	Number of Stock Options	Weighted Average Exercise Price (Per Share)
Outstanding at December 31, 2022	6,272,994	$	52.38
Granted	1,435,143	39.13
Exercised	(62,680)	30.93
Forfeited	(195,249)	53.65
Expired	(339,565)	53.15
Outstanding at September 30, 2023	7,110,643	49.82

Restricted Stock Units	Number of Restricted Stock Units	Weighted Average Grant Date Fair Value (Per Share)
Unvested at December 31, 2022	1,149,462	$	57.26
Granted	774,462	39.20
Vested	(385,732)	55.05
Forfeited	(143,866)	55.39
Unvested at September 30, 2023	1,394,326	48.01

The weighted average fair value of stock options granted during the nine months ended September 30, 2023 was $16.21 per share. The fair values of stock options granted were estimated using the Black-Scholes option valuation model with the following weighted average assumptions:

Black-Scholes Weighted Average Assumption	Nine Months Ended September 30, 2023
Expected dividend yield	None
Risk-free interest rate	4.00%
Expected volatility	41.32%
Expected term of options	4.86 years

Employee Stock Purchase Plan

The Company’s Amended and Restated 2014 Employee Stock Purchase Plan, or ESPP, features two six-month offering periods per year, running from January 1 to June 30 and July 1 to December 31. Under the ESPP, employees may elect to contribute after-tax earnings to purchase shares at 85% of the closing fair market value of the Company’s common stock on either the offering date or the purchase date, whichever is lesser. During the nine months ended September 30, 2023, 50,634 shares were purchased and issued through the ESPP.

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NET INCOME (LOSS) PER SHARE

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

NET INCOME (LOSS) PER SHARE

NET INCOME (LOSS) PER SHARE

Basic net income (loss) per common share is calculated by dividing the net income (loss) attributable to common shares by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share is calculated by dividing the net income (loss) attributable to common shares by the weighted average number of common shares outstanding plus dilutive potential common shares outstanding during the period.

Potential common shares include the shares of common stock issuable upon the exercise of outstanding stock options, the vesting of RSUs and the purchase of shares from the ESPP (using the treasury stock method), if applicable. Potential common shares associated with convertible notes are treated under the if-converted method, adjustments are made to the diluted net income (loss) per common share calculation as if the Company had converted the convertible debt on the first day of each period presented. Adjustments to the numerator are made to add back the interest expense associated with the convertible debt on a post-tax basis. Adjustments to the denominator reflect the number of shares assumed to be convertible at the beginning of the period.

Potential common shares are excluded from the diluted net income (loss) per common share computation to the extent they would be antidilutive.

The following table sets forth the computation of basic and diluted net income (loss) per common share for the three and nine months ended September 30, 2023 and 2022 (in thousands, except per share amounts):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerator:
Net income (loss)—basic	$	10,858	$	(693)	$	17,085	$	26,011
ASU 2020-06 convertible notes if-converted method adjustment	1,029		—		—		3,112
Adjusted net income (loss)—diluted	$	11,887	$	(693)	$	17,085	$	29,123
Denominator:
Weighted average common shares outstanding—basic	46,416		45,831		46,151		45,400
Computation of diluted securities:
ASU 2020-06 convertible notes if-converted method adjustment	5,608		—		—		5,608
Dilutive effect of stock options	20		—		68		937
Dilutive effect of RSUs	23		—		122		272
Dilutive effect of ESPP purchase options	—		—		2		3
Weighted average common shares outstanding—diluted	52,067		45,831		46,343		52,220
Net income per share:
Basic net income (loss) per common share	$	0.23	$	(0.02)	$	0.37	$	0.57
Diluted net income (loss) per common share	$	0.23	$	(0.02)	$	0.37	$	0.56

The following table summarizes the outstanding stock options, RSUs, ESPP purchase options and convertible senior notes that were excluded from the diluted net income (loss) per common share calculation because the effects of including these potential shares were antidilutive in the periods presented (in thousands):

	Three Months Ended September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022
Weighted average number of stock options	7,057	6,344	5,953	2,439
Convertible senior notes	—	5,608	5,608	797
Weighted average number of RSUs	1,349	1,180	956	277
Weighted average ESPP purchase options	39	—	13	—
Total	8,445	13,132	12,530	3,513

For the three months ended September 30, 2022 and nine months ended September 30, 2023, the antidilutive impact associated with the Company’s convertible senior notes would have included an interest expense add-back to net income of $1.0 million and $3.1 million, respectively.

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INCOME TAXES

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Income before income taxes and income tax expense are as follows (dollar amounts in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Income (loss) before income taxes:
Domestic	$	16,631		$	9,230		$	29,047		$	39,610
Foreign	(30)			(7,161)			(1,066)			(8,240)
Total income before income taxes	$	16,601		$	2,069		$	27,981		$	31,370
Income tax expense	$	5,743		$	2,762		$	10,896		$	5,359
Effective tax rate	35		%	133		%	39		%	17		%

The Company’s income tax expense represents the estimated annual effective tax rate applied to the year-to-date domestic operating results adjusted for certain discrete tax items.

The Company’s effective tax rates for the three and nine months ended September 30, 2023 include costs related to non-deductible stock-based compensation and non-deductible executive compensation, partially offset by credits and a fair value adjustment for Flexion contingent consideration.

The Company’s effective tax rates for the three and nine months ended September 30, 2022 include costs related to non-deductible executive compensation, valuation allowances recorded against non-U.S. operating results and U.S. capital losses, partially offset by benefits for a first quarter Skyepharma milestone payment, a fair value adjustment for Flexion contingent consideration

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CONTINGENT CONSIDERATION CHARGES (GAINS), RESTRUCTURING CHARGES AND OTHER

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

CONTINGENT CONSIDERATION CHARGES (GAINS), RESTRUCTURING CHARGES AND OTHER

CONTINGENT CONSIDERATION CHARGES (GAINS), RESTRUCTURING CHARGES AND OTHER

Contingent consideration charges (gains), restructuring charges and other for the three and nine months ended September 30, 2023 and 2022 summarized below (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Severance-related expenses	$	—	$	194	$	—	$	4,259
Acquisition-related fees	390		905		1,588		4,918
Other acquisition expenses	—		433		—		985
Total acquisition-related charges	390		1,532		1,588		10,162
Flexion contingent consideration	2,793		(520)		(3,847)		(13,837)
MyoScience contingent consideration	—		(523)		—		(9,557)
Restructuring charges	173		—		1,109		—
Total contingent consideration charges (gains), restructuring charges and other	$	3,356	$	489	$	(1,150)	$	(13,232)

Flexion Acquisition and Contingent Consideration

The Company recognized acquisition-related costs of $0.4 million and $1.6 million during the three and nine months ended September 30, 2023, respectively, primarily related to vacant and underutilized Flexion leases. The Company recognized acquisition-related costs of $1.5 million and $10.2 million during the three and nine months ended September 30, 2022, respectively, primarily related to severance, legal fees, third-party services and other one-time charges.

The Company recognized $2.8 million of contingent consideration charges and $3.8 million of contingent consideration gains during the three and nine months ended September 30, 2023, respectively. The Company recognized $0.5 million and $13.8 million of contingent consideration gains during the three and nine months ended September 30, 2022, respectively. See Note 9, Financial Instruments, for information regarding the method, key assumptions used in the fair value measurements of contingent consideration and more information regarding the changes in fair value.

MyoScience Contingent Consideration

The Company recognized $0.5 million and $9.6 million of contingent consideration gains during the three and nine months ended September 30, 2022, respectively. See Note 9, Financial Instruments, for information regarding the method, key assumptions used in the fair value measurements of contingent consideration and more information regarding the changes in fair value.

Restructuring Charges

In June 2023, the Company implemented a restructuring plan in an effort to improve its operational efficiencies. The restructuring charges are predominantly related to one-time employee termination benefits through a reduction of headcount, such as severance and related costs. During the three and nine months ended September 30, 2023, the Company recognized $0.2 million and $1.1 million, respectively, of restructuring charges, of which substantially all has been paid.

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

From time to time, the Company has been and may again become involved in legal proceedings arising in the ordinary course of its business, including those related to patents, product liability and government investigations. Except as described below, the Company is not presently a party to any legal proceedings that it believes to be material, and is not aware of any pending or threatened litigation against the Company which it believes could have a material adverse effect on its business, operating results, financial condition or cash flows.

MyoScience Milestone Litigation

In August 2020, the Company and its subsidiary, Pacira CryoTech, Inc. (“Pacira CryoTech”), filed a lawsuit in the Court of Chancery of the State of Delaware against Fortis Advisors LLC (“Fortis”), solely in its capacity as representative for the former securityholders of MyoScience, and certain other defendants, seeking declaratory judgment with respect to certain terms of the merger agreement for the MyoScience Acquisition (the “MyoScience Merger Agreement”), specifically related to the achievement of certain milestone payments under the MyoScience Merger Agreement. In addition, the Company and Pacira

CryoTech sought general, special and compensatory damages against the other defendants related to breach of fiduciary duties in connection with the purported achievement of milestone payments under the MyoScience Merger Agreement, and breach of the MyoScience Merger Agreement and certain other agreements with the defendants. In October 2020, Fortis filed an answer and counterclaim against the Company and Pacira CryoTech seeking to recover certain milestone payments under the MyoScience Merger Agreement. The total remaining value of these milestones is $30.0 million, plus attorneys’ fees.

A trial was conducted in September 2023, and a decision is expected in the second half of 2024. The Company is unable to predict the outcome of this action at this time.

eVenus Pharmaceutical Laboratories Litigations

In October 2021, the Company received a Notice Letter advising that eVenus Pharmaceutical Laboratories, Inc., or eVenus, of Princeton, New Jersey, submitted to the FDA an Abbreviated New Drug Application, or ANDA with a Paragraph IV certification seeking authorization for the manufacturing and marketing of a generic version of EXPAREL (266 mg/20 mL) in the U.S. prior to the expiration of U.S. Patent No. 11,033,495 (the ’495 patent).

In November 2021, the Company filed a patent infringement suit against eVenus and its parent company in the U.S. District Court for the District of New Jersey (21-cv-19829) asserting infringement of the ’495 patent. This triggered an automatic 30-month stay of final approval of the eVenus ANDA. On January 6, 2022, eVenus filed an Answer with counterclaims to the Complaint, alleging the ’495 patent is invalid and/or not infringed through the manufacture, sale, or offer for sale of the product described in product described in eVenus’s ANDA submission.

In December 2021, the Company received a second Notice Letter advising that eVenus submitted to the FDA an amendment to its ANDA with a Paragraph IV Certification seeking authorization for the manufacturing and marketing of a generic version of EXPAREL (133 mg/10 mL) in the U.S. prior to the expiration of the ’495 patent. In the Notice Letter, eVenus also advised that it submitted a Paragraph IV Certification to the FDA seeking authorization for the manufacturing and marketing of a generic version of EXPAREL (266 mg/20 mL and 133 mg/10 mL) in the U.S. prior to the expiration of U.S. Patent No. 11,179,336 (the ’336 patent). eVenus further alleges in the Notice Letter that both the ’495 patent and the ’336 patent are invalid and/or not infringed.

In February 2022, the Company filed a second patent infringement suit against eVenus and its parent company in the U.S. District Court for the District of New Jersey (22-cv-00718) asserting that the 133 mg/10 mL ANDA product will infringe the ’495 and ’336 patents and that the 266 mg/20 mL ANDA product will infringe the ’336 patent. This filing triggered a second automatic 30-month stay of final approval for the 133 mg/10 mL ANDA product. The first and second patent infringement suits were consolidated.

In February 2023, eVenus filed its first amended answer to the first amended complaint, alleging patent invalidity, non-infringement and inequitable conduct. The Company has denied the allegations in eVenus’s first amended answer. The Company has subsequently voluntarily dismissed its claims with respect to the ’336 Patent. A trial on the remaining claims is currently scheduled for February 2024.

In April 2023, the Company filed a third patent infringement suit against eVenus, its parent company, and Fresenius Kabi USA, LLC, in the U.S. District Court for the District of New Jersey (23-cv-2367) asserting that the 133 mg/10 mL and 266 mg/20 mL ANDA products will infringe U.S. Patent No. 11,426,348 (the ’348 patent). In July 2023, eVenus filed its answer with claims for declaratory judgment, alleging patent invalidity, non-infringement and inequitable conduct with respect to the ’348 patent as well as the Company’s other patents, U.S. Patent Nos. 11,278,494; 11,304,904; 11,311,486; 11,357,727 and 11,452,691.The parties have subsequently dismissed all patents other than the ’348 patent from this litigation.

The Company is unable to predict the outcome of this litigation at this time.

Research Development Foundation

Pursuant to an agreement with the Research Development Foundation, or RDF, the Company was required to pay RDF a low single-digit royalty on the collection of revenues from certain products, for as long as certain patents assigned to the Company under the agreement remain valid. RDF has the right to terminate the agreement for an uncured material breach by the Company, in connection with its bankruptcy or insolvency or if it directly or indirectly opposes or disputes the validity of the assigned patent rights. The Company’s ’495 patent was issued on June 15, 2021. Thereafter, RDF asserted that the issuance of that patent extends the Company’s royalty obligations under the agreement until 2041. The Company believes that the royalty period under the agreement ended on December 24, 2021 with the expiration of its U.S. Patent No. 9,585,838. Because of the disagreement over the interpretation of the agreement, in December 2021, the Company filed a declaratory judgment

lawsuit in the U.S. District Court for the District of Nevada (21-cv-02241). The lawsuit seeks a declaration from the court that the Company owes no royalties to RDF with respect to its EXPAREL product after December 24, 2021.

On August 8, 2023, the United States District Court, District of Nevada, granted the Company’s motion for partial summary judgment in respect to the Company’s claim for a declaration that it no longer owes royalties for EXPAREL made under the 45-liter manufacturing process as of December 24, 2021. As a result, the Company expects to receive $14.5 million from RDF, representing the royalties that the Company paid to RDF under protest after December 24, 2021 for EXPAREL made from the 45-liter manufacturing process. Once it becomes probable that the settlement amount will be received, the Company will record a settlement gain within other operating expenses in the condensed consolidated statement of operations. During the pendency of the remaining lawsuit, the Company will continue to pay royalties associated with the 200-liter manufacturing process to RDF under protest. The Company is unable to predict the outcome of this action at this time.

Other Commitments and Contingencies

Pediatric Trial Commitments

The FDA, as a condition of EXPAREL approval, has required the Company to study EXPAREL for infiltration and as a brachial plexus block in the pediatric setting. The Company was granted deferrals for the required pediatric trials until after the indications were approved in adults. Similarly, in Europe, the Company agreed with the European Medicines Agency, or EMA, on a Pediatric Investigation Plan as a prerequisite for submitting a Marketing Authorization Application (MAA) in the E.U. Despite the U.K.’s withdrawal from the E.U., the agreed pediatric plan is applicable in the U.K.

In December 2019, the Company announced positive results for its extended pharmacokinetic and safety study (“PLAY”) for local analgesia in children aged six to 17 undergoing cardiovascular or spine surgeries. Those positive results were the basis for the submission of a supplemental New Drug Application, or sNDA, in the U.S. to include use in patients six years of age and older for single-dose infiltration to produce postsurgical local analgesia. In March 2021, the Company announced that the FDA approved the sNDA in the U.S. In the E.U. and U.K., the Company also submitted the results of the PLAY study as Type II variations in the E.U. and U.K. to include the use of EXPAREL in children aged six years or older as a field block for treatment of somatic post-operative pain for small- to medium-sized wounds. The EMA and the Medicines and Healthcare Products Regulatory Agency, or MHRA, in the U.K. both approved the variations in their respective regions in November 2022. The Company received notification from the FDA in October 2023 that its pediatric studies requirement had been waived for the indication of brachial plexus interscalene nerve block to produce postsurgical regional analgesia in pediatric patients. The Company is still working with the FDA, EMA and MHRA to finalize the regulatory pathways for its remaining pediatric commitments.

Contingent Milestone Payments

Refer to Note 9, Financial Instruments, for information on potential contingent milestone payments related to the Flexion Acquisition and MyoScience Acquisition.

PCRX-201

PCRX-201, a novel, intra-articular gene therapy product candidate that produces the anti-inflammatory protein interleukin-1 receptor antagonist (IL-1Ra) treating OA pain in the knee, was added to the Company’s portfolio as part of the Flexion Acquisition in November 2021. Prior to the Flexion Acquisition, in February 2017, Flexion entered into an agreement with GQ Bio Therapeutics GmbH (formerly named GeneQuine Biotherapeutics GmbH) to acquire the global rights to PCRX-201, a gene therapy product candidate. As part of the agreement, up to an aggregate of $56.0 million of payments could become due upon the achievement of certain development and regulatory milestones, including up to $4.5 million through initiation of a Phase 2 proof of concept clinical trial and, following successful proof of concept, up to an additional $51.5 million in development and global regulatory approval milestone payments.

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Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Pay vs Performance Disclosure
Net income	$ 10,858	$ (693)	$ 17,085	$ 26,011

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Insider Trading Arrangements

3 Months Ended

9 Months Ended

Sep. 30, 2023

Sep. 30, 2023

Trading Arrangements, by Individual

Material Terms of Trading Arrangement

Rule 10b5-1 Trading Plans

The following table shows the “Rule 10b5-1 trading arrangements” and “non-Rule 10b5-1 trading arrangements” (as each term is defined in Item 408(a) of Regulation S-K) adopted by our directors and executive officers during the quarter ended September 30, 2023. No trading arrangements were terminated by our directors and executive officers during the quarter ended September 30, 2023.

			Trading Arrangement
Name and Position	Action	Date	Rule 10b5-1*	Non-Rule 10b5-1**	Total Number of Shares to be Sold	Expiration Date
Charles A. Reinhart, III Chief Financial Officer	Adopt (1)	7/5/2023		x	To Be Determined (2)	N/A
Kristen Williams Chief Administrative Officer and Secretary	Adopt (1)	7/27/2023		x	To Be Determined (2)	N/A
Roy Winston Chief Medical Officer and Orthopedic Franchise	Adopt	9/13/2023	x		To Be Determined (2) (3)	8/9/2024

* Intended to satisfy the affirmative defense of Rule 10b5-1(c).

** Not intended to satisfy the affirmative defense of Rule 10b5-1(c).

(1) Represents an election made upon acceptance of a grant of restricted stock units made in June 2023 to sell shares to cover tax withholding obligations upon vesting.

(2) The aggregate number of shares to be sold pursuant to each trading arrangement listed above is dependent on the amount of tax withholding required upon the vesting of restricted stock units, and, therefore, is indeterminable at this time.

(3) Dr. Winston’s trading arrangement includes 11,472 long shares to be sold upon the Company’s common stock reaching a specified limit price.

Rule 10b5-1 Arrangement Terminated

false

Non-Rule 10b5-1 Arrangement Terminated

false

Charles A. Reinhart, III [Member]

Trading Arrangements, by Individual

Name

Chief Financial Officer

Title

Charles A. Reinhart, III

Non-Rule 10b5-1 Arrangement Adopted

true

Adoption Date

7/5/2023

Kristen Williams [Member]

Trading Arrangements, by Individual

Name

Kristen Williams

Title

Chief Administrative Officer and Secretary

Non-Rule 10b5-1 Arrangement Adopted

true

Adoption Date

7/27/2023

Roy Winston [Member]

Trading Arrangements, by Individual

Name

Roy Winston

Title

Chief Medical Officer and Orthopedic Franchise

Rule 10b5-1 Arrangement Adopted

true

Adoption Date

9/13/2023

Directors and Executive Officers Plan Termination [Member]

Trading Arrangements, by Individual

Arrangement Duration

331 days

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

These interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”), for interim reporting. Pursuant to these rules and regulations, certain information and footnote disclosures normally included in complete annual financial statements have been condensed or omitted. Therefore, these interim condensed consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report”).

The condensed consolidated financial statements at September 30, 2023, and for the three and nine-month periods ended September 30, 2023 and 2022, are unaudited, but include all adjustments (consisting of only normal recurring adjustments) which, in the opinion of management, are necessary to present fairly the financial information set forth herein in accordance with GAAP. The condensed consolidated balance sheet at December 31, 2022 is derived from the audited consolidated financial statements included in the Company’s 2022 Annual Report. The condensed consolidated financial statements as presented reflect certain reclassifications from previously issued financial statements to conform to the current year presentation. The accounts of wholly-owned subsidiaries are included in the condensed consolidated financial statements. Intercompany accounts and transactions have been eliminated in consolidation.

The results of operations for these interim periods are not necessarily indicative of results that may be expected for any other interim periods or for the full year.

Concentration of Major Customers

Concentration of Major Customers

    The Company sells EXPAREL through a drop-ship program under which orders are processed through wholesalers (including AmerisourceBergen Health Corporation, Cardinal Health, Inc. and McKesson Drug Company), but shipments of the product are sent directly to individual accounts, such as hospitals, ambulatory surgery centers and individual doctors. The Company also sells EXPAREL directly to ambulatory surgery centers and physicians. The Company sells ZILRETTA primarily to specialty distributors and specialty pharmacies, who then subsequently resell ZILRETTA to physicians, clinics and certain medical centers or hospitals. The Company also contracts directly with healthcare providers and intermediaries such as Group Purchasing Organizations, or GPOs. The Company sells its bupivacaine liposome injectable suspension for veterinary use to a third-party licensee in the U.S. and sells iovera° directly to end users.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Schedule of Percentage of Revenue Comprised of the Three Largest Customers

The table below includes the percentage of revenues comprised by the Company’s three largest wholesalers in each period presented:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022
Largest wholesaler	33%	31%	33%	31%
Second largest wholesaler	24%	22%	24%	23%
Third largest wholesaler	19%	22%	20%	22%
Total	76%	75%	77%	76%

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REVENUE (Tables)

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

The following table represents disaggregated net product sales in the periods presented as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net product sales:
EXPAREL	$	128,667	$	132,642	$	394,202	$	398,854
ZILRETTA	28,798		26,494		82,393		77,546
iovera°	5,260		4,467		13,645		10,694
Bupivacaine liposome injectable suspension	858		2,957		2,241		5,469
Total net product sales	$	163,583	$	166,560	$	492,481	$	492,563

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INVENTORIES (Tables)

9 Months Ended

Sep. 30, 2023

Inventory Disclosure [Abstract]

Schedule of Components of Inventories

The components of inventories, net are as follows (in thousands):

	September 30,		December 31,
	2023		2022
Raw materials	$	49,196	$	39,810
Work-in-process	23,765		28,853
Finished goods	23,559		27,400
Total	$	96,520	$	96,063

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FIXED ASSETS (Tables)

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

Schedule of Fixed Assets Summarized by Major Category

Fixed assets, net, summarized by major category, consist of the following (in thousands):

	September 30,		December 31,
	2023		2022
Machinery and equipment	$	120,481	$	118,684
Leasehold improvements	61,508		61,302
Computer equipment and software	16,242		15,360
Office furniture and equipment	2,543		2,420
Construction in progress	106,383		103,226
Total	307,157		300,992
Less: accumulated depreciation	(131,374)		(117,480)
Fixed assets, net	$	175,783	$	183,512

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LEASES (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Schedule of Operating Lease Expense and Other Operating Lease Information

Total operating lease expense, net is as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Fixed lease costs	$	3,559	$	3,440	$	10,818	$	10,509
Variable lease costs	499		540		1,444		1,520
Sublease income	(167)		(169)		(489)		(169)
Total	$	3,891	$	3,811	$	11,773	$	11,860

Supplemental cash flow information related to operating leases is as follows (in thousands):

	Nine Months Ended
	September 30,
	2023		2022
Cash paid for operating lease liabilities, net of lease incentives	$	11,055	$	9,922

The weighted average remaining lease terms and the weighted average discount rates are summarized as follows:

	September 30,
	2023		2022
Weighted average remaining lease term	6.26 years		7.11 years
Weighted average discount rate	7.03	%	6.95	%

Schedule of Maturities of Operating Lease Liabilities

Maturities of the Company’s operating lease liabilities are as follows (in thousands):

Year	Aggregate Minimum Payments Due
2023 (remaining three months)	$	3,249
2024	13,038
2025	12,775
2026	12,814
2027	12,587
Thereafter	27,351
Total future lease payments	81,814
Less: imputed interest	(16,100)
Total operating lease liabilities	$	65,714

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GOODWILL AND INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination

Intangible assets, net, consists of the in-process research and development, or IPR&D, and developed technology from the Flexion Acquisition and developed technology and customer relationships from the MyoScience Acquisition and are summarized as follows (dollar amounts in thousands):

September 30, 2023	Gross Carrying Value		Accumulated Amortization		Intangible Assets, Net		Weighted-Average Useful Lives
Developed technologies	$	590,000	$	(127,336)	$	462,664	10 years, 5 months
Customer relationships	90		(40)		50		10 years
Total finite-lived intangible assets, net	590,090		(127,376)		462,714
Acquired IPR&D	34,866		—		34,866
Total intangible assets, net	$	624,956	$	(127,376)	$	497,580
December 31, 2022	Gross Carrying Value		Accumulated Amortization		Intangible Assets, Net		Weighted-Average Useful Lives
Developed technologies	$	590,000	$	(84,376)	$	505,624	10 years, 5 months
Customer relationships	90		(34)		56		10 years
Total finite-lived intangible assets, net	590,090		(84,410)		505,680
Acquired IPR&D	34,866		—		34,866
Total intangible assets, net	$	624,956	$	(84,410)	$	540,546

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DEBT (Tables)

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Schedule of Long-Term Debt Instruments

The carrying value of the Company’s outstanding debt is summarized as follows (in thousands):

	September 30,		December 31,
	2023		2022
Term loan A facility maturing March 2028	$	117,965	$	—
Term loan B facility maturing December 2026 (1)	—		284,704
0.750% Convertible senior notes due August 2025	397,976		396,126
3.375% Convertible senior notes due May 2024	8,641		8,641
Total	$	524,582	$	689,471

(1) The TLB Term Loan (as defined below) was refinanced on March 31, 2023 as discussed below.

Schedule of Composition of the Company's Debt and Financing Obligations

The total debt composition of the TLA Term Loan is as follows (in thousands):

	September 30,
	2023
Term loan A facility maturing March 2028	$	119,375
Deferred financing costs	(1,013)
Discount on debt	(397)
Total debt, net of debt discount and deferred financing costs	$	117,965

The total debt composition of the TLB Term Loan was as follows (in thousands):

	September 30,		December 31,
	2023		2022
Term loan B facility maturing December 2026	$	—	$	296,875
Deferred financing costs	—		(3,919)
Discount on debt	—		(8,252)
Total debt, net of debt discount and deferred financing costs	$	—	$	284,704

The total debt composition of the 2025 Notes is as follows (in thousands):

	September 30,		December 31,
	2023		2022
0.750% convertible senior notes due August 2025	$	402,500	$	402,500
Deferred financing costs	(4,524)		(6,374)
Total debt, net of debt discount and deferred financing costs	$	397,976	$	396,126

Schedule of Total Interest Expense Recognized Related to the Notes

The following table sets forth the total interest expense recognized in the periods presented (dollar amounts in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Contractual interest expense	$	3,471		$	9,343		$	16,670		$	26,724
Amortization of debt issuance costs	683			903			2,311			2,956
Amortization of debt discount	25			695			728			2,107
Capitalized interest and other (Note 5)	(715)			(1,085)			(2,791)			(2,852)
Total	$	3,464		$	9,856		$	16,918		$	28,935
Effective interest rate on total debt	2.98		%	5.42		%	3.96		%	5.66		%

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FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Carrying Amount and Fair Value of the Long-Term Debt

At September 30, 2023, the carrying values and fair values of the following financial assets and liabilities were as follows (in thousands):

	Carrying Value		Fair Value Measurements Using
			Level 1		Level 2		Level 3
Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis:
Financial Assets:
Equity investments	$	15,877	$	—	$	—	$	15,877
Convertible notes receivable	$	11,938	$	—	$	—	$	11,938
Financial Liabilities:
Acquisition-related contingent consideration	$	24,275	$	—	$	—	$	24,275
Financial Liabilities Measured at Amortized Cost:
Term loan A facility due March 2028	$	117,965	$	—	$	118,778	$	—
0.750% convertible senior notes due 2025 (1)	$	397,976	$	—	$	365,772	$	—
3.375% convertible senior notes due 2024	$	8,641	$	—	$	8,641	$	—

(1) The closing price of the Company’s common stock as reported on the Nasdaq Global Select Market was $30.68 per share at September 30, 2023 compared to a conversion price of $71.78 per share. At September 30, 2023, as the conversion price was above the stock price, the requirements for conversion have not been met. The maximum conversion premium that could have been due on the 2025 Notes is 5.6 million shares of the Company’s common stock, which assumes no increase in the conversion rate for certain corporate events.

Schedule of Investments without Readily Determinable Fair Value

The following investments have no readily determinable fair value and are recorded at cost minus impairment, if any, plus or minus observable price changes of identical or similar investments (in thousands):

	Equity Investments		Convertible Notes Receivable		Total
Balance at December 31, 2021	$	14,127	$	4,132	$	18,259
Purchases	11,750		1,250		13,000
Impairment	(10,000)		—		(10,000)
Foreign currency adjustments	—		(67)		(67)
Balance at December 31, 2022	15,877		5,315		21,192
Purchases	—		6,758		6,758
Foreign currency adjustments	—		(135)		(135)
Balance at September 30, 2023	$	15,877	$	11,938	$	27,815

Schedule of Key Assumptions used in the Valuation of Contingent Consideration

The following table includes the key assumptions used in the valuation of the Company’s contingent consideration:

Assumption	Flexion Ranges Utilized as of September 30, 2023
Discount rates	10.1% to 11.1%
Probabilities of payment for regulatory milestones	0% to 12.5%
Projected year of payment for regulatory and commercial milestones	2030

Schedule of Change in Contingent Consideration Recorded at Fair Value using Level 3 Measurements

The change in the Company’s contingent consideration recorded at fair value using Level 3 measurements is as follows (in thousands):

	Contingent Consideration Fair Value
Balance at December 31, 2021	$	57,598
Fair value adjustments and accretion	(29,476)
Balance at December 31, 2022	28,122
Fair value adjustments and accretion	(3,847)
Balance at September 30, 2023	$	24,275

Schedule of Short-Term and Noncurrent Available-for-Sale Investments

The following summarizes the Company’s short-term and noncurrent available-for-sale investments at September 30, 2023 and December 31, 2022 (in thousands):

September 30, 2023 Investments	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value (Level 2)
Current:
Asset-backed securities	$	15,473	$	—	$	(32)	$	15,441
Commercial paper	65,781		1		(110)		65,672
U.S. federal agency bonds	40,332		—		(116)		40,216
U.S. government bonds	14,797		—		(57)		14,740
Total	$	136,383	$	1	$	(315)	$	136,069

December 31, 2022 Investments	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value (Level 2)
Current:
Asset-backed securities	$	6,836	$	—	$	(3)	$	6,833
Commercial paper	134,423		23		(386)		134,060
U.S. federal agency bonds	41,971		—		(337)		41,634
U.S. government bonds	2,003		—		(18)		1,985
Subtotal	$	185,233	$	23	$	(744)	$	184,512
Noncurrent:
U.S. federal agency bonds	22,783		2		(66)		22,719
U.S. government bonds	14,499		—		(9)		14,490
Subtotal	37,282		2		(75)		37,209
Total	$	222,515	$	25	$	(819)	$	221,721

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STOCKHOLDERS' EQUITY (Tables)

9 Months Ended

Sep. 30, 2023

Stockholders' Equity Note [Abstract]

Schedule of Accumulated Other Comprehensive Loss

The following tables illustrate the changes in the balances of the Company’s accumulated other comprehensive loss for the periods presented (in thousands):

	Net Unrealized Gain (Loss) From Available-For-Sale Investments		Unrealized Foreign Currency Translation		Accumulated Other Comprehensive Loss
Balance at December 31, 2022	$	(523)	$	143	$	(380)
Net unrealized gain on investments, net of tax (1)	362		—		362
Foreign currency translation adjustments	—		8		8
Balance at September 30, 2023	$	(161)	$	151	$	(10)

	Net Unrealized (Loss) Gain From Available-For-Sale Investments		Unrealized Foreign Currency Translation		Accumulated Other Comprehensive (Loss) Income
Balance at December 31, 2021	$	139	$	28	$	167
Net unrealized loss on investments, net of tax (1)	(1,056)		—		(1,056)
Foreign currency translation adjustments	—		219		219
Balance at September 30, 2022	$	(917)	$	247	$	(670)

(1) Net of a $0.2 million tax expense and $0.3 million tax benefit for the nine months ended September 30, 2023 and 2022, respectively.

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STOCK PLANS (Tables)

9 Months Ended

Sep. 30, 2023

Stockholders' Equity Note [Abstract]

Schedule of Recognized Stock-Based Compensation Expense

The Company recognized stock-based compensation expense in the periods presented as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Cost of goods sold	$	1,272	$	1,599	$	4,432	$	4,429
Research and development	2,220		1,783		5,817		4,761
Selling, general and administrative	9,038		9,300		25,226		26,225
Total	$	12,530	$	12,682	$	35,475	$	35,415
Stock-based compensation from:
Stock options	$	5,957	$	6,711	$	18,163	$	20,038
Restricted stock units	6,373		5,758		16,592		14,588
Employee stock purchase plan	200		213		720		789
Total	$	12,530	$	12,682	$	35,475	$	35,415

Schedule of the Company's Stock Option Activity and Restricted Stock Unit Activity

The following tables contain information about the Company’s stock option and restricted stock unit, or RSU, activity for the nine months ended September 30, 2023:

Stock Options	Number of Stock Options	Weighted Average Exercise Price (Per Share)
Outstanding at December 31, 2022	6,272,994	$	52.38
Granted	1,435,143	39.13
Exercised	(62,680)	30.93
Forfeited	(195,249)	53.65
Expired	(339,565)	53.15
Outstanding at September 30, 2023	7,110,643	49.82

Restricted Stock Units	Number of Restricted Stock Units	Weighted Average Grant Date Fair Value (Per Share)
Unvested at December 31, 2022	1,149,462	$	57.26
Granted	774,462	39.20
Vested	(385,732)	55.05
Forfeited	(143,866)	55.39
Unvested at September 30, 2023	1,394,326	48.01

Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions

The fair values of stock options granted were estimated using the Black-Scholes option valuation model with the following weighted average assumptions:

Black-Scholes Weighted Average Assumption	Nine Months Ended September 30, 2023
Expected dividend yield	None
Risk-free interest rate	4.00%
Expected volatility	41.32%
Expected term of options	4.86 years

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NET INCOME (LOSS) PER SHARE (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Net Income (Loss) Per Common Share

The following table sets forth the computation of basic and diluted net income (loss) per common share for the three and nine months ended September 30, 2023 and 2022 (in thousands, except per share amounts):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerator:
Net income (loss)—basic	$	10,858	$	(693)	$	17,085	$	26,011
ASU 2020-06 convertible notes if-converted method adjustment	1,029		—		—		3,112
Adjusted net income (loss)—diluted	$	11,887	$	(693)	$	17,085	$	29,123
Denominator:
Weighted average common shares outstanding—basic	46,416		45,831		46,151		45,400
Computation of diluted securities:
ASU 2020-06 convertible notes if-converted method adjustment	5,608		—		—		5,608
Dilutive effect of stock options	20		—		68		937
Dilutive effect of RSUs	23		—		122		272
Dilutive effect of ESPP purchase options	—		—		2		3
Weighted average common shares outstanding—diluted	52,067		45,831		46,343		52,220
Net income per share:
Basic net income (loss) per common share	$	0.23	$	(0.02)	$	0.37	$	0.57
Diluted net income (loss) per common share	$	0.23	$	(0.02)	$	0.37	$	0.56

Schedule of Potential Dilutive Effect of the Securities Excluded from the Calculation of Diluted Loss Per Share

The following table summarizes the outstanding stock options, RSUs, ESPP purchase options and convertible senior notes that were excluded from the diluted net income (loss) per common share calculation because the effects of including these potential shares were antidilutive in the periods presented (in thousands):

	Three Months Ended September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022
Weighted average number of stock options	7,057	6,344	5,953	2,439
Convertible senior notes	—	5,608	5,608	797
Weighted average number of RSUs	1,349	1,180	956	277
Weighted average ESPP purchase options	39	—	13	—
Total	8,445	13,132	12,530	3,513

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INCOME TAXES (Tables)

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Schedule of Income Before Income Tax, Domestic and Foreign

Income before income taxes and income tax expense are as follows (dollar amounts in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Income (loss) before income taxes:
Domestic	$	16,631		$	9,230		$	29,047		$	39,610
Foreign	(30)			(7,161)			(1,066)			(8,240)
Total income before income taxes	$	16,601		$	2,069		$	27,981		$	31,370
Income tax expense	$	5,743		$	2,762		$	10,896		$	5,359
Effective tax rate	35		%	133		%	39		%	17		%

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CONTINGENT CONSIDERATION CHARGES (GAINS), RESTRUCTURING CHARGES AND OTHER (Tables)

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Acquisition-Related Charges (Gain), Restructuring Charges and Other

Contingent consideration charges (gains), restructuring charges and other for the three and nine months ended September 30, 2023 and 2022 summarized below (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Severance-related expenses	$	—	$	194	$	—	$	4,259
Acquisition-related fees	390		905		1,588		4,918
Other acquisition expenses	—		433		—		985
Total acquisition-related charges	390		1,532		1,588		10,162
Flexion contingent consideration	2,793		(520)		(3,847)		(13,837)
MyoScience contingent consideration	—		(523)		—		(9,557)
Restructuring charges	173		—		1,109		—
Total contingent consideration charges (gains), restructuring charges and other	$	3,356	$	489	$	(1,150)	$	(13,232)

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DESCRIPTION OF BUSINESS (Details)	9 Months Ended
	Sep. 30, 2023 segment product
Concentration Risk [Line Items]
Number of reportable segments | segment	1
Sales Revenue | Product Concentration Risk
Concentration Risk [Line Items]
Concentration of products (in products) | product	3

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Concentration Risk By Major Customer - customer	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Concentration of Major Customers
Number of customers			3
Sales Revenue | Largest wholesaler
Concentration of Major Customers
Percentage of revenue from customers to total revenue (in percent)	33.00%	31.00%	33.00%	31.00%
Sales Revenue | Second largest wholesaler
Concentration of Major Customers
Percentage of revenue from customers to total revenue (in percent)	24.00%	22.00%	24.00%	23.00%
Sales Revenue | Third largest wholesaler
Concentration of Major Customers
Percentage of revenue from customers to total revenue (in percent)	19.00%	22.00%	20.00%	22.00%
Sales Revenue | Total
Concentration of Major Customers
Percentage of revenue from customers to total revenue (in percent)	76.00%	75.00%	77.00%	76.00%

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REVENUE - Narrative (Details)	9 Months Ended
	Sep. 30, 2023
Minimum
Disaggregation of Revenue [Line Items]
Accounts receivable, payment terms	0 days
Maximum
Disaggregation of Revenue [Line Items]
Accounts receivable, payment terms	4 months

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REVENUE - Schedule of Disaggregated Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Total net product sales	$ 163,926	$ 167,466	$ 493,734	$ 494,868
EXPAREL
Disaggregation of Revenue [Line Items]
Total net product sales	128,667	132,642	394,202	398,854
ZILRETTA
Disaggregation of Revenue [Line Items]
Total net product sales	28,798	26,494	82,393	77,546
iovera°
Disaggregation of Revenue [Line Items]
Total net product sales	5,260	4,467	13,645	10,694
Bupivacaine liposome injectable suspension
Disaggregation of Revenue [Line Items]
Total net product sales	858	2,957	2,241	5,469
Total net product sales
Disaggregation of Revenue [Line Items]
Total net product sales	$ 163,583	$ 166,560	$ 492,481	$ 492,563

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INVENTORIES (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials	$ 49,196	$ 39,810
Work-in-process	23,765	28,853
Finished goods	23,559	27,400
Total	$ 96,520	$ 96,063

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FIXED ASSETS - Schedule of Major Categories (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
FIXED ASSETS
Property, plant, and equipment, gross	$ 307,157	$ 300,992
Less: accumulated depreciation	(131,374)	(117,480)
Fixed assets, net	175,783	183,512
Machinery and equipment
FIXED ASSETS
Property, plant, and equipment, gross	120,481	118,684
Leasehold improvements
FIXED ASSETS
Property, plant, and equipment, gross	61,508	61,302
Computer equipment and software
FIXED ASSETS
Property, plant, and equipment, gross	16,242	15,360
Office furniture and equipment
FIXED ASSETS
Property, plant, and equipment, gross	2,543	2,420
Construction in progress
FIXED ASSETS
Property, plant, and equipment, gross	$ 106,383	$ 103,226

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FIXED ASSETS - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
FIXED ASSETS
Depreciation expense	$ 4,100	$ 5,800	$ 14,100	$ 18,000
Fixed assets, net	175,783		175,783		$ 183,512
Asset retirement obligation	4,000		4,000		3,300
Construction in progress
FIXED ASSETS
Capitalized interest	700	$ 1,100	2,800	$ 2,900
Leasehold improvements | Europe
FIXED ASSETS
Fixed assets, net	$ 38,300		$ 38,300		$ 44,700

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LEASES - Narrative (Details) $ in Thousands	3 Months Ended
	Sep. 30, 2023 USD ($) lease
Lessee, Lease, Description [Line Items]
Number of embedded leases | lease	2
Obligation released for future cash payments	$ 81,814
Massachusetts
Lessee, Lease, Description [Line Items]
Lease exit fees	800
Obligation released for future cash payments	$ 1,600

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LEASES - Schedule of Operating Lease Expense and Other Operating Lease Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Lease, Cost [Abstract]
Fixed lease costs	$ 3,559	$ 3,440	$ 10,818	$ 10,509
Variable lease costs	499	540	1,444	1,520
Sublease income	(167)	(169)	(489)	(169)
Total	$ 3,891	$ 3,811	11,773	11,860
Cash Flow, Operating Activities, Lessee [Abstract]
Cash paid for operating lease liabilities, net of lease incentives			$ 11,055	$ 9,922
Weighted average remaining lease term (in years)	6 years 3 months 3 days	7 years 1 month 9 days	6 years 3 months 3 days	7 years 1 month 9 days
Weighted average discount rate (in percent)	7.03%	6.95%	7.03%	6.95%

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LEASES - Schedule of Maturities of Operating Lease Liabilities (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Leases [Abstract]
2023 (remaining three months)	$ 3,249
2024	13,038
2025	12,775
2026	12,814
2027	12,587
Thereafter	27,351
Total future lease payments	81,814
Less: imputed interest	(16,100)
Total operating lease liabilities	$ 65,714

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GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Mar. 31, 2022
Goodwill
Goodwill recorded in connection with the acquisition	$ 163,243		$ 163,243		$ 163,243
Amortization of acquired intangible assets	14,322	$ 14,322	42,966	$ 42,966
Amortization expense, remainder of fiscal year	14,300		14,300
Amortization expense, first period	57,300		57,300
Amortization expense, second period	37,400		37,400
Amortization expense, third period	7,900		7,900
Amortization expense, fourth period	$ 2,200		$ 2,200
When Annual Net Sales Collected Reach $500.0 Million | Skye Pharma Holding Inc.
Goodwill
Milestone payments for EXPAREL agreed in connection with acquisition						$ 32,000
Annual net sales threshold						$ 500,000

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GOODWILL AND INTANGIBLE ASSETS -Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Mar. 31, 2023	Sep. 30, 2023	Dec. 31, 2022
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value		$ 590,090	$ 590,090
Accumulated Amortization		(127,376)	(84,410)
Intangible Assets, Net		462,714	505,680
Gross Carrying Value		624,956	624,956
Intangible Assets, Net		497,580	540,546
Developed technologies
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value		590,000	590,000
Accumulated Amortization		(127,336)	(84,376)
Intangible Assets, Net		$ 462,664	505,624
Weighted-Average Useful Lives	10 years 5 months	10 years 5 months
Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value		$ 90	90
Accumulated Amortization		(40)	(34)
Intangible Assets, Net		$ 50	56
Weighted-Average Useful Lives	10 years	10 years
Acquired IPR&D
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value		$ 34,866	34,866
Intangible Assets, Net		$ 34,866	$ 34,866

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DEBT - Schedule of Long-Term Debt Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Jul. 31, 2020
Secured and Unsecured Debt
Debt Instrument [Line Items]
Long-term debt	$ 524,582	$ 689,471
Term loan A facility maturing March 2028 | Term Loan
Debt Instrument [Line Items]
Long-term debt	117,965	0
Term loan B facility maturing December 2026 | Term Loan
Debt Instrument [Line Items]
Long-term debt	$ 0	284,704
0.750% Convertible senior notes due August 2025
Debt Instrument [Line Items]
Stated interest rate (as a percent)	0.75%
0.750% Convertible senior notes due August 2025 | Unsecured Debt
Debt Instrument [Line Items]
Long-term debt	$ 397,976	396,126
Stated interest rate (as a percent)	0.75%		0.75%
3.375% Convertible senior notes due May 2024
Debt Instrument [Line Items]
Stated interest rate (as a percent)	3.375%
3.375% Convertible senior notes due May 2024 | Unsecured Debt
Debt Instrument [Line Items]
Long-term debt	$ 8,641	$ 8,641

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DEBT - Narrative (Details) $ / shares in Units, $ in Thousands					1 Months Ended				3 Months Ended		9 Months Ended
	Mar. 31, 2025 USD ($)	Jun. 30, 2023 USD ($)	Mar. 31, 2023 USD ($)	Apr. 01, 2022 USD ($) shares	Jan. 06, 2022	Dec. 31, 2021 USD ($)	Jul. 31, 2020 USD ($) $ / shares	Mar. 31, 2017 USD ($)	Sep. 30, 2023 USD ($) trading_day $ / shares	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) trading_day $ / shares	Sep. 30, 2022 USD ($) shares	Mar. 31, 2028 USD ($)	Dec. 31, 2022 USD ($)	Jan. 07, 2022 USD ($)	May 02, 2017 USD ($)
DEBT AND FINANCING OBLIGATIONS
Proceeds from Term loan A facility											$ 149,550	$ 0
Loss on early extinguishment of debt									$ 0	$ 0	$ (16,926)	0
Settlement period - convertible debt conversion request											40 days
Closing sale price (in dollars per share) | $ / shares									$ 30.68		$ 30.68
Amortization of debt premium									$ (25)	$ (695)	$ (728)	$ (2,107)
Common Stock
DEBT AND FINANCING OBLIGATIONS
Issuance of common stock upon conversion of 2022 convertible senior notes (in shares) | shares				101,521								102,000
Common stock increased additional paid-in capital				$ 3,000
Term loan A facility maturing March 2028
DEBT AND FINANCING OBLIGATIONS
Leverage ratio, maximum									3.00		3.00
Leverage ratio, minimum									1.50		1.50
Weighted average interest rate, at point in time									8.47%		8.47%
Term loan A facility maturing March 2028 | Minimum | Base Rate
DEBT AND FINANCING OBLIGATIONS
Net leverage ratio									2.00%		2.00%
Term loan A facility maturing March 2028 | Minimum | Secured Overnight Financing Rate (SOFR)
DEBT AND FINANCING OBLIGATIONS
Net leverage ratio									3.00%		3.00%
Term loan A facility maturing March 2028 | Maximum | Base Rate
DEBT AND FINANCING OBLIGATIONS
Net leverage ratio									2.75%		2.75%
Term loan A facility maturing March 2028 | Maximum | Secured Overnight Financing Rate (SOFR)
DEBT AND FINANCING OBLIGATIONS
Net leverage ratio									3.75%		3.75%
0.750% Convertible senior notes due August 2025
DEBT AND FINANCING OBLIGATIONS
Stated interest rate (as a percent)									0.75%		0.75%
Initial conversion rate of common stock per $1,000 of principal amount of Notes											0.0139324
Initial conversion price of notes into common stock (in dollars per share) | $ / shares							$ 71.78		$ 71.78		$ 71.78
Convertible debt, premium on common stock							32.50%
Closing sale price (in dollars per share) | $ / shares							$ 54.17
Market price of principal amount of notes									0.909		0.909
0.750% Convertible senior notes due August 2025 | Debt Redemption Terms Prior to February 3, 2023
DEBT AND FINANCING OBLIGATIONS
Threshold percentage stock price trigger									130.00%
Threshold trading days | trading_day									20
Threshold consecutive trading days | trading_day									30
0.750% Convertible senior notes due August 2025 | Debt Redemption Terms on or After August 1, 2023
DEBT AND FINANCING OBLIGATIONS
Threshold percentage stock price trigger											130.00%
Threshold trading days | trading_day											20
Threshold consecutive trading days | trading_day											30
Debt instrument, percentage of principal amount for computation of redemption price											100.00%
3.375% convertible senior notes due 2024
DEBT AND FINANCING OBLIGATIONS
Debt instrument, percentage of principal amount for computation of redemption price					100.00%
3.375% Convertible senior notes due May 2024
DEBT AND FINANCING OBLIGATIONS
Stated interest rate (as a percent)									3.375%		3.375%
Term Loan | Term loan A facility maturing March 2028
DEBT AND FINANCING OBLIGATIONS
Discount rate			0.30%
Debt instrument, face amount			$ 150,000
Proceeds from Term loan A facility			149,600
Debt instrument, unamortized discount			400						$ 397		$ 397
Periodic payment, principal		$ 2,800									2,800
Repayments of debt									27,800		27,800
Long-term debt									117,965		117,965			$ 0
Term Loan | Term loan A facility maturing March 2028 | Scenario, Forecast
DEBT AND FINANCING OBLIGATIONS
Periodic payment, principal	$ 3,800
Balloon payment to be paid													$ 85,300
Term Loan | Term loan B facility maturing December 2026
DEBT AND FINANCING OBLIGATIONS
Discount rate						3.00%
Debt instrument, face amount						$ 375,000
Proceeds from Term loan A facility						363,800
Debt instrument, unamortized discount						$ 11,200			0		0			8,252
Periodic payment, principal											9,400
Repayments of debt			$ 149,600
Prepayment fee percentage			2.00%
Repayment of debt principal											287,500
Loss on early extinguishment of debt											(16,900)
Long-term debt									$ 0		$ 0			284,704
Unsecured Debt | 0.750% Convertible senior notes due August 2025
DEBT AND FINANCING OBLIGATIONS
Debt instrument, face amount							$ 402,500
Stated interest rate (as a percent)							0.75%		0.75%		0.75%
Debt issued in private placement							$ 390,000				$ 402,500
Long-term debt									$ 397,976		$ 397,976			396,126
Unsecured Debt | Convertible Senior Notes Due 2022
DEBT AND FINANCING OBLIGATIONS
Repayments of debt				156,900			$ 211,100
Stated interest rate (as a percent)							2.375%	2.375%
Debt issued in private placement								$ 345,000
Debt instrument, repurchased face amount							$ 185,000
Remaining outstanding principal balance				160,000
Amortization of debt premium				$ 4,800
Unsecured Debt | 3.375% convertible senior notes due 2024
DEBT AND FINANCING OBLIGATIONS
Stated interest rate (as a percent)									3.375%		3.375%
Repurchase amount															$ 192,600
Unsecured Debt | 3.375% convertible senior notes due 2024 | Flexion
DEBT AND FINANCING OBLIGATIONS
Debt instrument, face amount																$ 201,300
Stated interest rate (as a percent)																3.375%
Unsecured Debt | 3.375% Convertible senior notes due May 2024
DEBT AND FINANCING OBLIGATIONS
Long-term debt									$ 8,641		$ 8,641			$ 8,641

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DEBT - Schedule of Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Mar. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Jul. 31, 2020
0.750% Convertible senior notes due August 2025
Debt Instrument [Line Items]
Stated interest rate (as a percent)	0.75%
Term Loan | Term loan A facility maturing March 2028
Debt Instrument [Line Items]
Long-term debt	$ 119,375
Deferred financing costs	(1,013)
Discount on debt	(397)	$ (400)
Total debt, net of debt discount and deferred financing costs	117,965		$ 0
Term Loan | Term loan B facility maturing December 2026
Debt Instrument [Line Items]
Long-term debt	0		296,875
Deferred financing costs	0		(3,919)
Discount on debt	0		(8,252)	$ (11,200)
Total debt, net of debt discount and deferred financing costs	$ 0		284,704
Unsecured Debt | 0.750% Convertible senior notes due August 2025
Debt Instrument [Line Items]
Stated interest rate (as a percent)	0.75%				0.75%
Long-term debt	$ 402,500		402,500
Deferred financing costs	(4,524)		(6,374)
Total debt, net of debt discount and deferred financing costs	$ 397,976		$ 396,126

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DEBT - Schedule of Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Debt Disclosure [Abstract]
Contractual interest expense	$ 3,471	$ 9,343	$ 16,670	$ 26,724
Amortization of debt issuance costs	683	903	2,311	2,956
Amortization of debt discount	25	695	728	2,107
Capitalized interest and other (Note 5)	(715)	(1,085)	(2,791)	(2,852)
Total	$ 3,464	$ 9,856	$ 16,918	$ 28,935
Effective interest rate on total debt (in percent)	2.98%	5.42%	3.96%	5.66%

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FINANCIAL INSTRUMENTS - Schedule of Carrying Amount and Fair Value of the Long-Term Debt (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions	9 Months Ended
	Sep. 30, 2023	Jul. 31, 2020
Financial Liabilities:
Closing sale price (in dollars per share)	$ 30.68
0.750% Convertible senior notes due August 2025
Financial Liabilities:
Stated interest rate (as a percent)	0.75%
Closing sale price (in dollars per share)		$ 54.17
Initial conversion price of notes into common stock (in dollars per share)	$ 71.78	$ 71.78
0.750% Convertible senior notes due August 2025 | Maximum
Financial Liabilities:
Debt instrument, convertible, conversion premium (in shares)	5.6
0.750% Convertible senior notes due August 2025 | Unsecured Debt
Financial Liabilities:
Stated interest rate (as a percent)	0.75%	0.75%
3.375% convertible senior notes due 2024 | Unsecured Debt
Financial Liabilities:
Stated interest rate (as a percent)	3.375%
Carrying Value
Financial Assets:
Equity investments	$ 15,877
Convertible notes receivable	11,938
Financial Liabilities:
Acquisition-related contingent consideration	24,275
Carrying Value | Term loan A facility maturing March 2028 | Term Loan
Financial Liabilities:
Convertible senior notes	117,965
Carrying Value | 0.750% Convertible senior notes due August 2025 | Unsecured Debt
Financial Liabilities:
Convertible senior notes	397,976
Carrying Value | 3.375% convertible senior notes due 2024 | Unsecured Debt
Financial Liabilities:
Convertible senior notes	8,641
Fair Value Measurements Using | Level 1
Financial Assets:
Equity investments	0
Convertible notes receivable	0
Financial Liabilities:
Acquisition-related contingent consideration	0
Fair Value Measurements Using | Level 1 | Term loan A facility maturing March 2028 | Term Loan
Financial Liabilities:
Convertible senior notes	0
Fair Value Measurements Using | Level 1 | 0.750% Convertible senior notes due August 2025 | Unsecured Debt
Financial Liabilities:
Convertible senior notes	0
Fair Value Measurements Using | Level 1 | 3.375% convertible senior notes due 2024 | Unsecured Debt
Financial Liabilities:
Convertible senior notes	0
Fair Value Measurements Using | Level 2
Financial Assets:
Equity investments	0
Convertible notes receivable	0
Financial Liabilities:
Acquisition-related contingent consideration	0
Fair Value Measurements Using | Level 2 | Term loan A facility maturing March 2028 | Term Loan
Financial Liabilities:
Convertible senior notes	118,778
Fair Value Measurements Using | Level 2 | 0.750% Convertible senior notes due August 2025 | Unsecured Debt
Financial Liabilities:
Convertible senior notes	365,772
Fair Value Measurements Using | Level 2 | 3.375% convertible senior notes due 2024 | Unsecured Debt
Financial Liabilities:
Convertible senior notes	8,641
Fair Value Measurements Using | Level 3
Financial Assets:
Equity investments	15,877
Convertible notes receivable	11,938
Financial Liabilities:
Acquisition-related contingent consideration	24,275
Fair Value Measurements Using | Level 3 | Term loan A facility maturing March 2028 | Term Loan
Financial Liabilities:
Convertible senior notes	0
Fair Value Measurements Using | Level 3 | 0.750% Convertible senior notes due August 2025 | Unsecured Debt
Financial Liabilities:
Convertible senior notes	0
Fair Value Measurements Using | Level 3 | 3.375% convertible senior notes due 2024 | Unsecured Debt
Financial Liabilities:
Convertible senior notes	$ 0

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FINANCIAL INSTRUMENTS - Schedule of Investments Without Readily Determinable Fair Value (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Investments Without Readily Determinable Fair Value Roll Forward [Abstract]
Beginning balance	$ 21,192	$ 18,259
Purchases	6,758	13,000
Impairment		(10,000)
Foreign currency adjustments	(135)	(67)
Ending balance	27,815	21,192
Equity Investments
Investments Without Readily Determinable Fair Value Roll Forward [Abstract]
Beginning balance	15,877	14,127
Purchases	0	11,750
Impairment		(10,000)
Foreign currency adjustments	0	0
Ending balance	15,877	15,877
Convertible Notes Receivable
Investments Without Readily Determinable Fair Value Roll Forward [Abstract]
Beginning balance	5,315	4,132
Purchases	6,758	1,250
Impairment		0
Foreign currency adjustments	(135)	(67)
Ending balance	$ 11,938	$ 5,315

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FINANCIAL INSTRUMENTS - Narrative (Details)	1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Apr. 30, 2019 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) wholesaler	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($) wholesaler	Nov. 30, 2021 USD ($)
Concentration Risk [Line Items]
Changes in contingent consideration				$ (3,847,000)	$ (23,394,000)
Interest receivable		$ 400,000		$ 400,000		$ 800,000
Number of major customers | wholesaler				3		3
Amount of allowance for doubtful accounts		0		$ 0		$ 0
Accounts Receivable | Concentration Risk By Major Customer | Major Customer One
Concentration Risk [Line Items]
Concentration risk (as a percent)				37.00%		34.00%
Accounts Receivable | Concentration Risk By Major Customer | Major Customer Two
Concentration Risk [Line Items]
Concentration risk (as a percent)				18.00%		19.00%
Accounts Receivable | Concentration Risk By Major Customer | Major Customer Three
Concentration Risk [Line Items]
Concentration risk (as a percent)				15.00%		18.00%
Flexion And MyoScience Acquisition
Concentration Risk [Line Items]
Acquisition-related contingent consideration		24,300,000		$ 24,300,000		$ 28,100,000
Flexion Acquisition
Concentration Risk [Line Items]
Acquisition-related contingent consideration		425,500,000		$ 425,500,000			$ 372,300,000
Payment term				60 days
Changes in contingent consideration		2,800,000	$ 500,000	$ 3,800,000	13,800,000
Contingent consideration		$ 24,300,000		$ 24,300,000		28,100,000
Flexion Acquisition | Weighted Average | Contingent Consideration | Level 3 | Discount rates
Concentration Risk [Line Items]
Measurement input, contingent consideration		0.106		0.106
Flexion Acquisition | Weighted Average | Contingent Consideration | Level 3 | Measurement Input, Probability of Success of Regulatory Milestones
Concentration Risk [Line Items]
Measurement input, contingent consideration		0.125		0.125
Myoscience Acquisition
Concentration Risk [Line Items]
Acquisition-related contingent consideration		$ 0		$ 0		$ 0
Payment term	60 days
Changes in contingent consideration		0	$ 523,000	0	$ 9,557,000
Contingent consideration	$ 100,000,000
Contingent consideration, current		$ 43,000,000		$ 43,000,000
Myoscience Acquisition | Contingent Consideration | Level 3 | Probabilities of payment for regulatory milestones
Concentration Risk [Line Items]
Measurement input, contingent consideration		0		0

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FINANCIAL INSTRUMENTS - Schedule of Key Assumptions used in the Valuation of Contingent Consideration (Details) - Fair Value, Inputs, Level 3 - Flexion Acquisition - Contingent Consideration	Sep. 30, 2023
Minimum | Discount rates
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input, contingent consideration	0.101
Minimum | Probabilities of payment for regulatory milestones
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input, contingent consideration	0
Maximum | Discount rates
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input, contingent consideration	0.111
Maximum | Probabilities of payment for regulatory milestones
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input, contingent consideration	0.125

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FINANCIAL INSTRUMENTS - Schedule of Change in Contingent Consideration Recorded at Fair Value Using Level 3 Measurements (Details) - Contingent Consideration - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 28,122	$ 57,598
Fair value adjustments and accretion	(3,847)	(29,476)
Ending balance	$ 24,275	$ 28,122

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FINANCIAL INSTRUMENTS - Schedule of Available-For-Sale Securities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Fair Value Measurements
Cost	$ 136,383	$ 222,515
Gross Unrealized Gains	1	25
Gross Unrealized Losses	(315)	(819)
Fair Value (Level 2)	136,069	221,721
Current:
Fair Value Measurements
Cost		185,233
Gross Unrealized Gains		23
Gross Unrealized Losses		(744)
Fair Value (Level 2)		184,512
Noncurrent:
Fair Value Measurements
Cost		37,282
Gross Unrealized Gains		2
Gross Unrealized Losses		(75)
Fair Value (Level 2)		37,209
Asset-backed securities | Current:
Fair Value Measurements
Cost	15,473	6,836
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(32)	(3)
Fair Value (Level 2)	15,441	6,833
Commercial paper | Current:
Fair Value Measurements
Cost	65,781	134,423
Gross Unrealized Gains	1	23
Gross Unrealized Losses	(110)	(386)
Fair Value (Level 2)	65,672	134,060
U.S. federal agency bonds | Current:
Fair Value Measurements
Cost	40,332	41,971
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(116)	(337)
Fair Value (Level 2)	40,216	41,634
U.S. federal agency bonds | Noncurrent:
Fair Value Measurements
Cost		22,783
Gross Unrealized Gains		2
Gross Unrealized Losses		(66)
Fair Value (Level 2)		22,719
U.S. government bonds | Current:
Fair Value Measurements
Cost	14,797	2,003
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(57)	(18)
Fair Value (Level 2)	$ 14,740	1,985
U.S. government bonds | Noncurrent:
Fair Value Measurements
Cost		14,499
Gross Unrealized Gains		0
Gross Unrealized Losses		(9)
Fair Value (Level 2)		$ 14,490

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STOCKHOLDERS' EQUITY (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period	$ 807,975	$ 756,636	$ 775,010	$ 730,408
Net unrealized loss on investments, net of tax	146	(163)	362	(1,056)
Balance at ending of period	831,551	770,123	831,551	770,123
Unrealized gain (loss) on investments, tax expense (benefit)			200	(300)
Net Unrealized Gain (Loss) From Available-For-Sale Investments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period			(523)	139
Net unrealized loss on investments, net of tax			362	(1,056)
Foreign currency translation adjustments			0	0
Balance at ending of period	(161)	(917)	(161)	(917)
Unrealized Foreign Currency Translation
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period			143	28
Net unrealized loss on investments, net of tax			0	0
Foreign currency translation adjustments			8	219
Balance at ending of period	151	247	151	247
Accumulated Other Comprehensive (Loss) Income
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period	(173)	(605)	(380)	167
Net unrealized loss on investments, net of tax			362	(1,056)
Foreign currency translation adjustments			8	219
Balance at ending of period	$ (10)	$ (670)	$ (10)	$ (670)

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STOCK PLANS - Narrative (Details)	1 Months Ended	9 Months Ended
	Jun. 30, 2023 shares	Sep. 30, 2023 offeringPeriod $ / shares shares
Stock Incentive Plans
Stock incentive plan, increased number of shares authorized for issuance (in shares)	3,300,000
Weighted average fair value (in dollars per share) | $ / shares		$ 16.21
Purchase price of common stock, ESPP (as a percent)		85.00%
Common stock issued under employee stock purchase plan (in shares)		50,634
Weighted average ESPP purchase options
Stock Incentive Plans
Number of offering periods for ESPP | offeringPeriod		2
ESPP purchasing period		6 months

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STOCK PLANS - Schedule of Stock Based Compensation Expenses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Share-Based Compensation
Total	$ 12,530	$ 12,682	$ 35,475	$ 35,415
Stock-based compensation from:
Stock options	5,957	6,711	18,163	20,038
Restricted stock units	6,373	5,758	16,592	14,588
Employee stock purchase plan	200	213	720	789
Total	12,530	12,682	35,475	35,415
Cost of goods sold
Share-Based Compensation
Total	1,272	1,599	4,432	4,429
Research and development
Share-Based Compensation
Total	2,220	1,783	5,817	4,761
Selling, general and administrative
Share-Based Compensation
Total	$ 9,038	$ 9,300	$ 25,226	$ 26,225

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STOCK PLANS - Schedule of Stock Based Compensation Activity (Details)	9 Months Ended
	Sep. 30, 2023 $ / shares shares
Number of Stock Options
Outstanding beginning of period (in shares) | shares	6,272,994
Granted (in shares) | shares	1,435,143
Exercised (in shares) | shares	(62,680)
Forfeited (in shares) | shares	(195,249)
Expired (in shares) | shares	(339,565)
Outstanding end of period (in shares) | shares	7,110,643
Weighted Average Exercise Price (Per Share)
Outstanding beginning of period (in dollars per share) | $ / shares	$ 52.38
Granted (in dollars per share) | $ / shares	39.13
Exercised (in dollars per share) | $ / shares	30.93
Forfeited (in dollars per share) | $ / shares	53.65
Expired (in dollars per share) | $ / shares	53.15
Outstanding at end of period (in dollars per share) | $ / shares	$ 49.82
Restricted Stock Units (RSUs)
Number of Restricted Stock Units
Unvested at beginning of period (in shares) | shares	1,149,462
Granted (in shares) | shares	774,462
Vested (in shares) | shares	(385,732)
Forfeited (in shares) | shares	(143,866)
Unvested at end of period in shares) | shares	1,394,326
Weighted Average Grant Date Fair Value (Per Share)
Unvested at beginning of period (in dollars per share) | $ / shares	$ 57.26
Granted (in dollars per share) | $ / shares	39.20
Vested (in dollars per share) | $ / shares	55.05
Forfeited (in dollars per share) | $ / shares	55.39
Unvested at end of period (in dollars per share) | $ / shares	$ 48.01

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STOCK PLANS - Schedule of Valuation Assumptions (Details) - Employee Stock Option	9 Months Ended
	Sep. 30, 2023
Stock Incentive Plans
Expected dividend yield (as a percent)	0.00%
Risk free interest rate (as a percent)	4.00%
Expected volatility (as a percent)	41.32%
Expected term of options (in years)	4 years 10 months 9 days

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NET INCOME (LOSS) PER SHARE - Schedule of Computation of EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Numerator:
Net income (loss)—basic	$ 10,858	$ (693)	$ 17,085	$ 26,011
Adjusted net income (loss)—diluted	$ 11,887	$ (693)	$ 17,085	$ 29,123
Denominator:
Weighted average common shares outstanding - basic (in shares)	46,416	45,831	46,151	45,400
Computation of diluted securities:
Weighted average number of shares outstanding - diluted (in shares)	52,067	45,831	46,343	52,220
Net income per share:
Basic net income (loss) per common share (in dollars per share)	$ 0.23	$ (0.02)	$ 0.37	$ 0.57
Diluted net income (loss) per common share (in dollars per share)	$ 0.23	$ (0.02)	$ 0.37	$ 0.56
Dilutive effect of stock options
Computation of diluted securities:
Dilutive effect of share based compensation arrangements (in shares)	20	0	68	937
Dilutive effect of RSUs
Computation of diluted securities:
Dilutive effect of share based compensation arrangements (in shares)	23	0	122	272
Dilutive effect of ESPP purchase options
Computation of diluted securities:
Dilutive effect of share based compensation arrangements (in shares)	0	0	2	3
Accounting Standards Update 2020-06
Numerator:
ASU 2020-06 convertible notes if-converted method adjustment	$ 1,029	$ 0	$ 0	$ 3,112
Computation of diluted securities:
ASU 2020-06 convertible notes if-converted method adjustment (in shares)	5,608	0	0	5,608

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NET INCOME (LOSS) PER SHARE- Schedule of Antidilutive Securities (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
EARNINGS PER SHARE
Antidilutive effects of including these potential shares (in shares)	8,445	13,132	12,530	3,513
Weighted average number of stock options
EARNINGS PER SHARE
Antidilutive effects of including these potential shares (in shares)	7,057	6,344	5,953	2,439
Convertible senior notes
EARNINGS PER SHARE
Antidilutive effects of including these potential shares (in shares)	0	5,608	5,608	797
Weighted average number of RSUs
EARNINGS PER SHARE
Antidilutive effects of including these potential shares (in shares)	1,349	1,180	956	277
Weighted average ESPP purchase options
EARNINGS PER SHARE
Antidilutive effects of including these potential shares (in shares)	39	0	13	0

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NET INCOME (LOSS) PER SHARE- Narrative (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
EARNINGS PER SHARE
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	8,445	13,132	12,530	3,513
Convertible senior notes
EARNINGS PER SHARE
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	0	5,608	5,608	797
Convertible senior notes | Trading Revenue
EARNINGS PER SHARE
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount		1,000	3,100

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INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income (loss) before income taxes:
Domestic	$ 16,631	$ 9,230	$ 29,047	$ 39,610
Foreign	(30)	(7,161)	(1,066)	(8,240)
Income before income taxes	16,601	2,069	27,981	31,370
Income tax expense	$ 5,743	$ 2,762	$ 10,896	$ 5,359
Effective tax rate (in percent)	35.00%	133.00%	39.00%	17.00%

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CONTINGENT CONSIDERATION CHARGES (GAINS), RESTRUCTURING CHARGES AND OTHER - Acquisition Related Charges (Gains) and Other (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Restructuring Cost and Reserve [Line Items]
Severance-related expenses	$ 0	$ 194	$ 0	$ 4,259
Total acquisition-related charges	390	1,532	1,588	10,162
Changes in contingent consideration			3,847	23,394
Restructuring charges	173	0	1,109	0
Total contingent consideration charges (gains), restructuring charges and other	3,356	489	(1,150)	(13,232)
Flexion
Restructuring Cost and Reserve [Line Items]
Changes in contingent consideration	2,793	(520)	(3,847)	(13,837)
Myoscience Acquisition
Restructuring Cost and Reserve [Line Items]
Changes in contingent consideration	0	(523)	0	(9,557)
Acquisition-related fees
Restructuring Cost and Reserve [Line Items]
Acquisition-related costs	390	905	1,588	4,918
Other acquisition expenses
Restructuring Cost and Reserve [Line Items]
Acquisition-related costs	$ 0	$ 433	$ 0	$ 985

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CONTINGENT CONSIDERATION CHARGES (GAINS), RESTRUCTURING CHARGES AND OTHER - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Business Acquisition [Line Items]
Changes in contingent consideration			$ (3,847)	$ (23,394)
Restructuring charges	$ 173	$ 0	1,109	0
One-time Termination Benefits
Business Acquisition [Line Items]
Restructuring charges	200		1,100
Flexion Acquisition
Business Acquisition [Line Items]
Changes in contingent consideration	2,800	500	3,800	13,800
Flexion Acquisition | Legal Fees
Business Acquisition [Line Items]
Acquisition-related costs	400	1,500	1,600	10,200
Flexion
Business Acquisition [Line Items]
Changes in contingent consideration	(2,793)	520	3,847	13,837
Myoscience Acquisition
Business Acquisition [Line Items]
Changes in contingent consideration	$ 0	$ 523	$ 0	$ 9,557

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COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended		9 Months Ended
	Oct. 31, 2020	Feb. 28, 2017	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Aug. 08, 2023
Loss Contingencies [Line Items]
Expect to receive partial summary judgment							$ 14,500
Restructuring charges			$ 173	$ 0	$ 1,109	$ 0
Fortis
Loss Contingencies [Line Items]
Loss contingency, damages sought	$ 30,000
GeneQuine | Flexion | Achievement of Development and Regulatory Milestones
Loss Contingencies [Line Items]
Maximum milestone payment to be received		$ 56,000
Estimate of restructuring costs, once probable		4,500
Restructuring charges		$ 51,500

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Label	Element	Value
Accounting Standards Update [Extensible Enumeration]	us-gaap_AccountingStandardsUpdateExtensibleList	Accounting Standards Update 2020-06 [Member]