Pacira Pharmaceuticals, Inc.
) recently announced its intention to raise funds through the
issuance of convertible senior notes due 2019 worth $100 million.
Initial buyers will have a 30-day option of buying additional
notes worth $10 million.
Other details like the interest rate, conversion rate, and offer
price will be provided at the time of pricing of the offering.
Pacira, however, laid out its plans for the utilization of the
funds that will be raised. About $30 million of the net proceeds
will be used for the repayment of all outstanding debt under its
senior secured credit facility. At the end of the third quarter
of 2012, the company had long-term debt of $24.9 million. On May
10, 2012, Oxford Finance had provided the company with a $27.5
million senior secured term loan.
The balance of the net proceeds from the offering will be used
for the commercialization of Exparel, additional development of
Exparel and general corporate purposes. Exparel is indicated for
administration into the surgical site to produce postsurgical
Exparel gained US Food and Drug Administration (FDA) approval in
Oct 2011 and was launched in Apr 2012. In the third quarter of
2012, Exparel revenues were $4.6 million, accounting for 54.1% of
total revenues. Pacira is trying to expand Exparel's label for
additional indications like ileostomy reversal, open and
laparoscopic colectomy procedures, as well as a wide range of
plastic surgery usage and TAP (Transverse Abdominis Plane)
We currently have a Neutral recommendation on Pacira. The
stock carries a Zacks Rank #3 (Hold). Right now,
Valeant Pharmaceuticals International, Inc.
) looks more attractive with a Zacks Rank #1 (Strong Buy).
PACIRA PHARMACT (PCRX): Free Stock Analysis
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