Pacira Pharmaceuticals (PCRX) PT Lowered to $39 at H.C. Wainwright

H.C. Wainwright analyst Oren Livnat lowered the price target on Pacira Pharmaceuticals (NASDAQ: PCRX) to $39.00 (from $57.00) while maintaining a Buy rating.

The analyst commented: "On Friday (8/9), in litigation between Pacira and the sole Exparel generic challenger—Chinese manufacturer eVenus and its commercial partner Fresenius Kabi (FRE:GR; not rated)—unfortunately District Court found the ‘495 patent invalid as obvious and anticipated. While we’d hoped for an outright win (valid and infringed), which would have sent the stock toward $40; in our view, this is far from a decisive blow to Exparel and Pacira’s prospects. We believe it’s just another necessary, albeit painful, shoe to drop in the path toward longer-term visibility. The judge ruled’ 495 invalid, but did not rule on infringement (moot), and, importantly, did not find Pacira “inequitable conduct.” Pacira has four additional OB-listed patents (expiring 2041) in earlier-stage litigation vs. eVenus, and this ruling does not invalidate those as well. The other patents still have a presumption of validity as they are, presumably, sufficiently differentiated to have been granted by multiple USPTO examiners despite ‘495 cited as prior art. Further, Pacira insists that information from the ‘495 litigation (sealed) make it clear eVenus almost certainly infringes the latter patents. Thus, contrary to others’ reports that the generic will now likely launch as early as this year, we’d be shocked if Fresenius launched “at risk” during ongoing other patent litigation—pushing a launch free of triple-damages risk likely out to mid-2026 at least. We’ve long thought the parties could eventually reach a settlement once they were brought closer together on entry-timing following incremental rulings. The current valuation reflects a certain and near-term generic launch, in our view. We'd be buying strongly down here, and we’d be encouraged to see PCRX aggressively buying back stock as well. To more prudently factor in some probability of earlier generics, we lower our target to $39 from $57 target, and we strongly reiterate our Buy rating."

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