Can Pacira Pharmaceuticals' Exparel Reduce Opioid Abuse?

By Motley Fool Staff Markets Fool.com

Pacira Pharmaceuticals' (NASDAQ: PCRX) Exparel provides pain relief after surgery, and that's reducing the need to prescribe opiates. The company's studying Exparel's use in multiple indications, and that could make it a bigger alternative to oral opioids. Can its use help address the opioid crisis?

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In this clip from The Motley Fool's Industry Focus: Healthcare podcast, analyst Kristine Harjes is joined by Todd Campbell to discuss Exparel and its future.

A full transcript follows the video.

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This video was recorded on April 12, 2017.

Kristine Harjes:We aregoing to dive into a handful of companies that areworking on developing alternative types of pain medication. The first one is one that wecovered in our March episode ofIndustry Focus: Healthcareon the show that we did about year-to-datebest performers. This one isPacira Pharmaceuticals, which,at the time, was up 56% just from Jan. 1, and now is up "only" 43%.

Todd Campbell:Yeah. It'sbeen a very good year for this company, andpart of that is because it markets a drug that could,theoretically, reduce the likelihood of someone falling into that trap ofbecoming dependent on opiates. Kristine, how many prescriptions are being written per day for opiates?

Harjes:Six hundred fifty thousand opioid prescriptions are dispensed every single day, according to the HHS.

Campbell:OK. Let'sthink about that for a second, let'sgive our listeners a moment to digest that, andcome up with a guess in their mindshow much in dollars, what kind of a market size, do they think that be?

Harjes:Hint, hint: It's big. It's really big.

Campbell:Yeah, $12.6 billion are being spent on opiate medication every year. While that's afrightening statistic for many different reasons, I think it can't be lost that, when you have a market that's that big, and you have a potential to disrupt it bydeveloping something that's far less addictive, you'regoing to have a lot of drugmakers that are going to step up and try to come up with a solution. Pacira is one of those companies. It has a drug, Exparel,that's been on the market for a few years now. It's alocal anesthetic that isinserted at the time of a surgical procedure that has beenproven to not only reduce pain in patients, but to reduce thelikelihood of them needing opiates in theirpost-operative recovery period.

Harjes:Right. So, what makes this a novel drug is, it'sdelivered with this Depofoamapplicator that is supposed to extend the release timeso that the numbing medicine works for a longer amount of time, sohopefully you don'twind up on an opioid afterward.

Campbell:Right. Bupivacaine, which I'm sure I'm butchering, is theanalgesic, andnormally that wears off within eight hours. Butif you add Depofoam to it, you getsignificantly longer pain relief. In trials, the trials thatjustified the FDA approving this drug, you found that this drugsignificantly extended the period of time for a person to say, "I am in so much pain that I need an opiate."

Harjes:Exactly. Thiscompany now has a partnershipwithJohnson & Johnson.Hopefullythat will help boostsales of the drug even further. So far, it's doing very well. It had 11% sales growthbetween 2015 and 2016. They're forecasting another 9% at least, and that was at the low end for 2017. This company has a host ofother things they're doing, butbecause we want to stay fairly focused, we will leave them for another episode. But keep your eye out for more data. They have phase 3 data coming out in some nerve-block studies; that should be later this year. All in all,lots going on with the company as a whole, and also for this specific drug.

Campbell:Yeah, because, again, Exparel is only being used incertain patients going undercertain procedures. The idea is, if we can expand that out to a largeraddressable patient population, great, and those studies will read out data over the course of next year or so, and hopefully showsimilar results to what they saw in their firstregistration ready trial.

Kristine Harjes owns shares of Johnson & Johnson. Todd Campbell has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Johnson & Johnson. The Motley Fool has a disclosure policy.