NEW YORK (TheStreet) -- Pacira Pharmaceuticals (PCRX) - Get Report stock is up by 15.33% to $72 in early afternoon trading on Tuesday after the FDA allowed the company to market its post-surgical analgesia treatment as not being limited to a specific surgery.
The Parsippany, NJ-based pharmaceutical company's drug, Exparel, is used to treat pain during surgery or medical treatments.
Pacira's lawsuit earlier this year argued that it should be able to promote the treatment for a wide variety of surgeries, because its FDA-approved label did not limit the drug's use to two surgeries, Bloomberg reports. The company cited free speech in its lawsuit.
The resolution will allow Pacira to promote its treatment for a wide variety of surgeries, beyond the two surgeries it has been tested on, bunion and hemorrhoid surgeries, Bloomberg reports.
"We are pleased to announce a successful collaboration with the FDA to resolve this matter in an expeditious and meaningful way that allows us to get back to the important task at hand-reducing postsurgical opioid exposure by providing a non-opioid option like EXPAREL to as many patients as appropriate," CEO Dave Stack said in a statement on Tuesday.
So far today, 2.81 million shares of Pacira have traded, versus its 30-day average of about 655,000 shares.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate PACIRA PHARMACEUTICALS INC as a Hold with a ratings score of C. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 3.6%. Since the same quarter one year prior, revenues rose by 19.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.50, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.19, which illustrates the ability to avoid short-term cash problems.
- The gross profit margin for PACIRA PHARMACEUTICALS INC is currently very high, coming in at 80.12%. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, PCRX's net profit margin of 4.96% significantly trails the industry average.
- Net operating cash flow has significantly decreased to $2.82 million or 68.61% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- PCRX's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 30.30%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- You can view the full analysis from the report here: PCRX