What changed in this filing

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Item 1. Business

2021-03-01 compared with 2020-02-21 · 378 added, 290 removed, 499 unchanged (57% of the section changed)

Pacira BioSciences, Inc., a Delaware corporation, changed its name from Pacira Pharmaceuticals, Inc.

upon completing its acquisition of MyoScience, a privately-held medical technology company, in April 2019 (referred to herein as the “MyoScience Acquisition”) in order to better reflect a broadening portfolio of innovative non-opioid pain management and regenerative health solutions.

Pacira BioSciences, Inc.

is the holding company for our California operating subsidiary named Pacira Pharmaceuticals, Inc., or Pacira California.

In March 2007, we acquired Pacira California from SkyePharma Holdings, Inc.

Pacira BioSciences, Inc., a Delaware corporation, is the holding company for our California operating subsidiary named Pacira Pharmaceuticals, Inc.

In March 2007, we acquired Pacira Pharmaceuticals, Inc.

from SkyePharma Holdings, Inc.

(now a subsidiary of Vectura Group plc), or Skyepharma (referred to herein as the “Skyepharma Acquisition”).

Pacira California retained the name Pacira Pharmaceuticals, Inc.

upon the completion of the MyoScience Acquisition.

In April 2019, we acquired MyoScience, a privately-held medical technology company (referred to herein as the “MyoScience Acquisition”).

Unless the context requires otherwise, references to “Pacira,” “we,” the “Company,” “us” and “our” in this Annual Report refers to Pacira BioSciences, Inc., a Delaware corporation, and its subsidiaries.

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In October 2010, we changed our name to Pacira Pharmaceuticals, Inc.

and in April 2019 changed our name to Pacira BioSciences, Inc.

and in April 2019, we changed our name to Pacira BioSciences, Inc.

upon the completion of the MyoScience Acquisition.

Our principal executive offices are located in Parsippany, New Jersey.

Trademarks and Service Marks

Pacira ® , EXPAREL ® , iovera° ® , DepoFoam ® , DepoCyt ® (United States (U.S.) registration), DepoCyte ® (European Union (E.U.) registration), the Pacira logo and other trademarks or service marks of Pacira appearing in this Annual Report are the property of Pacira.

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This Annual Report contains additional trade names, trademarks and service marks of other companies.

We are a leading provider of non-opioid pain management options to advance and improve outcomes for health care practitioners and their patients, focused on becoming a global leader in delivering innovative non-opioid pain management and

regenerative health solutions to surgeons and anesthesiologists.

Our corporate mission is to provide an opioid alternative to as many appropriate patients as possible.

We are the industry leader in our commitment to non-opioid pain management and regenerative health solutions to improve patients’ journeys along the neural pain pathway.

Our corporate mission is to provide an opioid alternative to as many patients as possible using enhanced recovery after surgery (“ERAS”) multimodal protocols and opioids for rescue only.

To that end, we are advancing a three-part growth strategy focusing on:

(i) expanding the use of EXPAREL and iovera°, our non-opioid pain therapies;

(ii) pursuing innovative opioid-sparing options through in-licensing and acquisition;

and (iii) advancing a pipeline of non-opioid opportunities for acute and chronic pain management.

In April 2019, we completed the MyoScience Acquisition and added the iovera° system to our commercial offering.

The iovera° system is a non-opioid handheld cryoanalgesia device used to alleviate pain.

(i) expanding the utilization of EXPAREL and iovera°, our non-opioid pain therapies;

(ii) pursuing innovative opioid-sparing options through in-licensing and acquisition and (iii) advancing a pipeline of non-opioid opportunities for acute and chronic pain management.

EXPAREL was approved by the FDA in October 2011 and was commercially launched in April 2012.

EXPAREL is currently indicated for single-dose infiltration in adults to produce postsurgical local analgesia and as an interscalene brachial plexus nerve block to produce postsurgical regional analgesia.

Since its initial approval in 2011 for single-dose infiltration, more than six million patients have been treated with EXPAREL.

Since its initial approval in 2011 for single-dose infiltration, more than eight million patients have been treated with EXPAREL.

EXPAREL consists of bupivacaine, an amide-type local anesthetic, encapsulated in DepoFoam, our proprietary extended release drug delivery technology, that delivers bupivacaine over time for extended analgesia.

We believe that EXPAREL addresses a significant medical need for a long-acting non-opioid postsurgical analgesic and plays a significant role in opioid minimization strategies.

We believe that EXPAREL addresses a significant medical need for a safe and effective long-acting non-opioid postsurgical analgesic and plays a significant role in opioid minimization strategies.

EXPAREL is designed for recovery with minimal opioid use by (i) delivering targeted local analgesia at the surgical site;

(ii) reliably releasing bupivacaine over time for prolonged analgesia;

(iii) eliminating the need for catheters and pumps that may hinder recovery and (iv) providing long-lasting pain control while reducing the need for opioids.

(iii) eliminating the need for catheters and pumps that may hinder recovery;

and (iv) providing long-lasting pain control while reducing the need for opioids.

Our net product sales of EXPAREL in 2020 were $413.3 million.

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In addition to EXPAREL, DepoFoam is also the basis for future clinical candidates.

The iovera° system is an FDA-approved medical device used to deliver precise, controlled doses of cold temperature only to targeted nerves, which has been FDA 510(k) cleared for use in pain applications since March 2014.

The iovera° system is highly complementary to EXPAREL as a non-opioid therapy that alleviates pain by disrupting pain signals being transmitted to the brain from the site of injury or surgery.

For the year ended December 31, 2019 , net product sales of iovera° were $7.9 million.

We began recognizing sales of iovera° after completing the MyoScience Acquisition in April 2019.

In April 2019, we completed the MyoScience Acquisition and added the iovera° system to our commercial offering.

The iovera° system is an FDA-approved, non-opioid handheld cryoanalgesia device used to produce precise, controlled doses of cold temperature only to targeted nerves, which has been FDA 510(k) cleared for use in pain applications since March 2014.

The iovera° system is highly complementary to EXPAREL 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.

For the year ended December 31, 2020, our net product sales of iovera° were $8.8 million.

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| 2020 Form 10-K | Page 7

Product Portfolio and Product Candidate Pipeline

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

PROPRIETARY PIPELINE

Product / Product Candidates

Next Expected Milestone

EXPAREL (bupivacaine liposome injectable suspension) :

Surgical infiltration

Approved (U.S.)

Geographic expansion

Interscalene brachial plexus nerve block

Approved (U.S.)

Publish results / geographic expansion

C-section TAP field block 1

Publish results in peer-reviewed journal

C-section TAP field block follow-on study 1

Publish results in peer-reviewed journal

Complete study

Surgical infiltration/Nerve block

Advance regulatory submission

Surgical infiltration/Nerve block

Advance regulatory submission

Surgical infiltration/Nerve block

Pre-submission meeting

Pediatric infiltration

Lower extremity nerve block

Complete study

Pediatric nerve block

Defining Pathway

Seek label expansion

The iovera° system:

Total knee arthroplasty (TKA)

Initiate studies

Blocking of pain

Initiate studies

DepoFoam-based local anesthetic

Advance preclinical activities

DepoDexmedetomidine

Initiate clinical study

NOCITA ® (bupivacaine liposome injectable suspension) :

Postsurgical analgesia in dogs and cats

Approved (U.S.)

Marketed by Aratana Therapeutics, Inc.

* Pediatric FDA action date of March 22, 2021 is for infiltration in patients aged 6 to 17 years old.

Study designs have not been finalized for pediatric populations in infiltration or nerve block in patients aged 0 to less than 6 years old.

- TAP block is a transversus abdominis plane field block

- NOCITA ® is a registered trademark of Aratana Therapeutics, Inc., a wholly owned subsidiary of Elanco Animal Health, Inc.

We continue to advance our goal to be a global leader in delivering innovative non-opioid pain management and regenerative health solutions.

We continue to advance our goal to be the global leader in delivering innovative non-opioid pain management and regenerative health solutions.

To achieve this, we are advancing a three-pronged strategy:

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We are seeing increased use within the anesthesiology community through EXPAREL-based regional approaches that are enabling the shift of complex, painful procedures to the hospital outpatient and ambulatory settings.

Our partnership with DePuy Synthes Sales Inc., or DePuy Synthes, part of the Johnson & Johnson family of companies, has established the role of EXPAREL as the foundation of opioid-sparing protocols for painful orthopedic procedures, including shoulder, hip fracture, joint reconstruction, and spine surgeries.

We are expanding the body of clinical evidence through Phase 4 studies in key surgical settings, such as C-section and spine.

EXPAREL has become the foundation of opioid-sparing protocols for painful orthopedic procedures, including shoulder, hip fracture, joint reconstruction, and spine surgeries.

We are expanding utilization through education and Phase 4 clinical evidence in key surgical settings, such as Cesarean section, or C-section, and other abdominal procedures.

In addition, we are advancing clinical and regulatory activities to expand the EXPAREL label to include the pediatric and lower extremity nerve block settings.

For iovera°, we are focusing on iovera° plus EXPAREL as a multimodal procedural solution for total knee arthroplasty, or TKA, as well as drug-free, opioid-free, surgery-free pain management for osteoarthritis of the knee.

For iovera°, we are focusing on iovera° plus EXPAREL as a multimodal procedural solution for

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| 2020 Form 10-K | Page 8

total knee arthroplasty, or TKA, as well as drug-free, opioid-free, surgery-free pain management for osteoarthritis of the knee.

• Pursuing innovative acquisition targets that align with our strategy :

We believe EXPAREL, iovera° and the DepoFoam platform offer a strong foundation to address the opioid epidemic.

Building on these company assets, we are also pursuing innovative acquisition targets ranging from devices, therapeutics, cell therapies and regenerative

Building on these company assets, we are also pursuing innovative acquisition targets ranging from devices, therapeutics, cell therapies and regenerative medicines.

Our goal is to build a portfolio of customer-focused non-opioid pain and regenerative health solutions to improve patients’ journeys along the neural pain pathway.

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DepoFoam provides flexible delivery and can be designed to offer an immediate release dose followed by sustained delivery.

We are advancing a program for the intrathecal delivery of a DepoFoam-based local anesthetic as a potential alternative to the use of subarachnoid opioids delivered by pumps and catheters and DepoDexmedetomidine for end-of-life pain and painful conditions in the elderly.

We are advancing a Phase 1 study to evaluate the epidural delivery of a DepoFoam-based local anesthetic as a potential alternative to the use of intrathecal opioids delivered by pumps and catheters and preclinical activities are underway for other DepoFoam-based clinical candidates targeting inflammation for chronic pain opportunities.

The Opioid Epidemic

Opioid addiction in the U.S.

has reached epidemic proportions, with the Centers for Disease Control and Prevention, or CDC, reporting more than 70,000 drug overdose deaths in the U.S.

in 2017, of which opioids were involved in nearly 48,000 of these overdose deaths or approximately 68% of all drug overdose deaths.

Overreliance on opioids in the postsurgical setting has caused a rapid deluge of opioid misuse, abuse and addiction.

has reached epidemic proportions, with the Centers for Disease Control and Prevention, or CDC, reporting that more than 80,000 drug overdose deaths occurred in the U.S.

in the 12-months ending May 2020.

This represents a worsening of the drug overdose epidemic in the U.S.

and is the largest number of drug overdoses for a 12-month period ever recorded.

The recent increase in drug overdose mortality began in 2019 and continued into 2020, prior to the declaration of the COVID-19 National Emergency in the U.S.

The increases in drug overdose deaths appear to have accelerated during the COVID-19 pandemic.

Synthetic opioids are the primary driver of the increases in overdose deaths.

The 12-month count of synthetic opioid overdose deaths increased 38% from the 12-months ended June 2019 compared with the 12-months ended May 2020.

In 2018, new research showed that patients received nearly 100 to 200 opioid pills to help manage pain from four common procedures ranging from rotator cuff repair and hip replacement to knee replacement and sleeve gastrectomy.

Further, one-quarter of orthopedic surgery patients were prescribed a daily dose of opioids equal to 90 milligrams of morphine or more, which are doses so potent that the CDC says they put patients at high risk for overdose.

The report shows that across the seven orthopedic and soft tissue surgical procedures examined, patients were prescribed an average of 82 opioid pills each to help manage postsurgical pain.

A 2017 report shows that across the seven orthopedic and soft tissue surgical procedures examined, patients were prescribed an average of 82 opioid pills each to help manage postsurgical pain.

The research also indicates that close to 9% of surgical patients became newly persistent users in 2017, continuing to take these opioids at least three to six months after their procedure.

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and among persistent users, females were prescribed 15% more opioids than their male counterparts.

These findings come from the report, Exposing a Silent Gateway to Persistent Opioid Use—A Choices Matter Status Report , based on an analysis of 2017 adjudicated medical and pharmacy claims data conducted by the IQVIA Institute for Human Data Science and a nationwide survey of surgical patients and surgeons fielded in 2018 by Wakefield Research.

These findings come from the report, United States for Non-Dependence:

An Analysis of the Impact of Opioid Overprescribing in America , based on an analysis of 2016 adjudicated medical and pharmacy claims data conducted by QuintilesIMS.

EXPAREL provides continuous and extended postsurgical analgesia and reduces the consumption of opioid medications.

We believe EXPAREL simplifies postsurgical pain management, minimizes breakthrough episodes of pain and has the potential to result in improved patient care and outcomes, as well as enhanced hospital economics.

Our EXPAREL growth strategy is summarized below:

Our EXPAREL growth strategy is summarized as follows:

• Expanding the use of EXPAREL in key surgical settings:

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Positive findings from a multicenter RCT in C-section were presented at the most recent annual meeting of the Society for Obstetric Anesthesia and Perinatology (SOAP), and we recently reported positive topline results from a follow-on Phase 4 study in C-section procedures that compared an opioid-free EXPAREL arm to an opioid-based standard of care arm.

EXPAREL is being incorporated into an increasing number of Enhanced Recovery After Surgery, or ERAS, protocols from major academic centers for a wide range of procedures.

In addition, we are advancing clinical and regulatory activities to support the future expansion of EXPAREL to the pediatric and lower extremity nerve block settings.

Regulatory initiatives are also advancing in new global markets, such as Europe, Canada and China.

EXPAREL is being incorporated into an increasing number of ERAS protocols from major academic centers for a wide range of procedures.

In addition, we are advancing clinical and regulatory activities to support the future expansion of

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EXPAREL to the pediatric and lower extremity nerve block settings.

In November 2020, the European Commission, or EC, approved EXPAREL 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.

Additionally, regulatory initiatives are advancing in global markets such as Canada and China.

• Expanding access to EXPAREL and driving education and awareness around the need for opioid-sparing strategies:

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The Centers for Medicare and Medicaid Services, or CMS, is providing Medicare reimbursement for EXPAREL when administered in an Ambulatory Surgery Center, or ASC, through the product-specific Healthcare Common Procedure Coding System (HCPCS) code of C9290.

Effective January 1, 2020, CMS removed total hip arthroplasty and six spinal procedures from its inpatient-only list, making these procedures eligible for payment by Medicare in the hospital outpatient setting.

The final CMS rule for 2020 also added TKA and several other procedures to its listing of ASC covered procedures.

Effective January 1, 2021, CMS added total hip arthroplasty to its listing of ASC covered procedures.

The final CMS rule for 2021 also includes a scheduled phase-out of the inpatient-only list over the next three years.

Under this plan, by 2024, no procedures will be mandated to be conducted in the in-patient setting.

In addition, we continue to advance our Choices Matter national educational campaign, aimed at empowering patients to proactively discuss postsurgical pain management, including non-opioid options, with their healthcare providers.

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We have a growing network of strategic collaborations to expand education on the importance of non-opioid multimodal alternatives for post-surgical pain management and broaden our commercial reach.

These include agreements with industry partners, as well as healthcare providers and hospital systems to support their implementation of opioid-sparing enhanced recovery protocols.

In January 2017, we formed a partnership with DePuy Synthes to support the promotion, education and training of EXPAREL in orthopedics.

These include agreements with healthcare providers and hospital systems to support their implementation of opioid-sparing enhanced recovery protocols.

We are collaborating on national and regional training initiatives with large anesthesia physician practices, such as MEDNAX, Inc.

and Envision Physician Services.

Our growing coalition of collaborators also includes Aetna, the American Association of Oral and Maxillofacial Surgeons, or AAOMS, the American College of Surgeons, the American Society for Enhanced Recovery, Cancer Treatment Centers of America, the Illinois Surgical Quality Improvement Collaborative, WellStar Health System and Shatterproof.org.

EXPAREL Clinical Benefits

We believe EXPAREL can replace the use of bupivacaine via elastomeric pumps as the foundation of a multimodal regimen for long-acting postsurgical pain management.

We believe EXPAREL can replace the use of bupivacaine delivered via elastomeric pumps as the foundation of a multimodal regimen for long-acting postsurgical pain management.

Based on our clinical data, EXPAREL:

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• leverages existing interscalene brachial plexus nerve block, field block and infiltration administration techniques;

facilitates treatment of both small and large surgical sites.

• facilitates treatment of a variety of surgical sites.

We believe EXPAREL is a key component of long-acting postsurgical pain management regimens that reduce the need for opioids.

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• reduced pain scores by 46% versus placebo (p<0.0001);

allowed 13% of patients who received EXPAREL to remain opioid-free for 48 hours after surgery (p<0.01) compared to zero patients in the placebo arm.

In our Phase 4 trial of EXPAREL versus bupivacaine HCl in TKA, EXPAREL:

decreased total opioid consumption by 78% (p=0.0048) from zero to 48 hours after surgery;

reduced pain scores by 14% (p=0.0381) from 12 to 48 hours after surgery;

allowed 10% of patients in the EXPAREL arm to remain opioid-free through 48 and 72 hours (compared to zero patients in the bupivacaine arm;

In our Phase 4 trial of EXPAREL versus bupivacaine administered via a transversus abdominis plane block in C-section procedures:

Comparable pain control with a reduction in total opioid consumption with EXPAREL plus bupivacaine HCl versus bupivacaine HCl:

52% reduction through 72 hours, (p=0.0117)

49% reduction at one week (p=0.0175)

41% reduction at two weeks (trending toward significance;

More than a two-fold increase in the percentage of opioid-spared patients with EXPAREL versus bupivacaine HCl (defined as patients who took no more than one oxycodone 10mg tablet, or equivalent, with no opioid-related side effects through 72 hours;

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• allowed 13% of patients who received EXPAREL to remain opioid-free for 48 hours after surgery (p<0.01) compared to one opioid-free patient in the placebo arm.

EXPAREL can improve patient satisfaction and outcomes.

We believe EXPAREL:

provides effective pain control without the need for expensive and difficult-to-use delivery technologies that extend the duration of action for bupivacaine, such as elastomeric bags, or opioids administered through patient-controlled analgesia, or PCA, when used as part of a multimodal postsurgical pain regimen;

reduces the need for patients to be constrained by elastomeric bags and PCA systems, which are barriers to earlier ambulation and may introduce catheter-related issues, including infection;

• provides effective pain control without the need for expensive and difficult-to-use delivery technologies that extend the duration of action for bupivacaine, such as elastomeric pumps, or opioids administered through patient-controlled analgesia, or PCA, when used as part of a multimodal postsurgical pain regimen;

• reduces the need for patients to be constrained by elastomeric pumps and PCA systems, which are barriers to earlier ambulation and may introduce catheter-related issues, including infection;

• promotes maintenance of early postsurgical pain management, which may reduce the time spent in the intensive care unit.

EXPAREL Health Economic Benefits

In addition to being efficacious and safe, we believe that EXPAREL provides health economic benefits that play an important role in formulary decision-making that are often overlooked.

Several members of our management team have extensive experience applying health economic outcomes research to support commercial success.

Our strategy is to work directly with the senior leadership of our hospital customers, integrated health networks, quality improvement organizations, key opinion leaders, or KOLs, in the field of postsurgical pain management and leading influencer hospitals to provide them with retrospective and prospective studies to demonstrate the economic benefits of EXPAREL.

In March 2019, we reported new data showing that a patient-optimizing, opioid-sparing ERAS pathway, which includes intraoperative infiltration with EXPAREL, results in high rates of early discharge and patient satisfaction among Medicare-insured patients undergoing TKA or total hip arthroplasty, or THA.

Findings also demonstrate that the vast majority of patients do not require more than a seven-day opioid prescription following discharge.

The research was detailed during a podium presentation at the American Academy of Orthopaedic Surgeons (AAOS) 2019 Annual Meeting.

Retrospective chart review data were captured for 645 consecutive Medicare patients who underwent primary inpatient TKA (337 patients) or THA (308 patients) between June 1, 2015, and November 16, 2017.

All patients followed a procedure-specific ERAS protocol which included EXPAREL (Van Horne A, Van Horne J.

Patient-optimizing enhanced recovery pathways for total knee and hip arthroplasty in Medicare patients:

implication for transition to ambulatory surgery centers.

Arthroplasty Today 2019).

Key findings included:

84% did not require any additional opioid prescriptions beyond the initial seven-day prescription provided at discharge (while nationally, 38% of knee replacement patients are still taking opioids two months after surgery)

84% of patients were same-day discharged to home, following their joint replacement

Patients reported high satisfaction with their perioperative experience (98% were highly satisfied with their pain management)

Comparable or lower complication rates to nationally reported rates

In June 2019, we reported new data on the use of EXPAREL following THA.

The findings show that patients receiving EXPAREL had a significant reduction in opioid use, hospital length of stay, or LOS, and total hospitalization costs compared to THA patients who did not receive the product.

The results were published in The Journal of Medical Economics .

This retrospective analysis utilized data from the Premier Healthcare Database from January 2011 through April 2017 for the ten hospitals in the U.S.

with the highest number of THA procedures using EXPAREL.

Patients undergoing THA who received EXPAREL were matched in a one-to-one ratio to a control group of patients whose pain management strategy did not include the product.

The study population included a total of 12,589 patients, with 7,232 Medicare patients and 5,357 commercial insurance patients.

Results showed that patients undergoing THA who received EXPAREL compared to those who did not demonstrated a significant:

Decrease in opioid consumption, expressed in oral morphine equivalent dosing (MED), among Medicare and commercial insurance patients (105 mg MED and 81 mg MED reductions, respectively;

Decrease in average hospital LOS by 0.7 days in both the Medicare and commercial insurance groups (p<0.0001)

Decrease in total hospitalization costs in the Medicare population (-$561;

Increase in likelihood to be discharged home in both the Medicare and commercial insurance groups (1.66 and 1.57, respectively;

Results of this study are consistent with findings from several retrospective studies and RCTs on the use of EXPAREL for total joint replacement procedures, including additional data published in 2018 in The Journal of Medical Economics that found a decrease in opioid consumption, hospital LOS and hospitalization costs for patients receiving EXPAREL following TKA (Asche et al.

Impact of treatment with liposomal bupivacaine on hospital costs, length of stay, and discharge status in patients undergoing total knee arthroplasty at high-use institutions, Journal of Medical Economics, DOI:

10.1080/13696998.2018.1543190).

Third Molar Procedures

In September 2017, we announced a collaboration with Aetna, one of the nation’s leading diversified health care benefits companies, with the support of AAOMS.

This national program aims to reduce the number of opioid tablets dispensed to patients undergoing impacted third molar (wisdom tooth) extractions by at least 50 percent through the utilization of EXPAREL to provide prolonged non-opioid postsurgical pain control.

Aetna now includes the cost of EXPAREL as a covered expense for impacted third molar extractions performed by surgeons who have completed training on use of the product.

According to a Journal of the American Medical Association (JAMA) study, more than two-thirds of patients who underwent surgical tooth extractions reported unused prescription opioids, with the majority also indicating that these medications are neither safely stored nor disposed of.

These facts suggest that there is a dangerous accumulation of opioids in the home, which are available for potential diversion or misuse.

In June 2019, investigators reported results from a study confirming that patients who received EXPAREL were prescribed significantly fewer opioids compared to those who did not.

In this study, researchers reviewed data from 600 patients who underwent impacted third molar extractions between 2012 and 2018 in two dental clinics;

one in Connecticut and one in North Carolina.

Data from 300 patients who received EXPAREL were compared to data from 300 patients who did not receive EXPAREL.

Patients in the EXPAREL treatment group received:

Fewer total prescribed opioid tablets including refills, compared to patients in the non-EXPAREL group (6.4 tablets vs.

15.5 tablets, respectively;

Fewer additional opioid prescriptions compared to the non-EXPAREL group (3.3% of patients required a refill vs.

7.7% of patients, respectively)

The research was presented at the June 2019 International Association for Dental Research meeting in Vancouver, Canada and highlighted in the Aetna Fall 2019 Dental Dialog newsletter.

Key EXPAREL Markets

EXPAREL is used across multiple orthopedic procedures, including joint reconstruction, shoulder, spine, extremities and hip fractures.

EXPAREL-based ERAS protocols are becoming a cornerstone of opioid-sparing postsurgical pain management and enabling the shifting of many complex, painful orthopedic procedures to the 23-hour stay environment.

EXPAREL is being adopted in an increasing number of spine surgeries as a key component of a multimodal pain management solution enabling rapid recovery after surgery and a shift to the outpatient site of care.

Common applications include infiltration, erector spinae plane (ESP) blocks and TAP blocks.

EXPAREL administered as a brachial plexus nerve block is a key and growing part of our business.

An EXPAREL brachial plexus block provides pain coverage for the upper quadrant for use in rotator cuff, shoulder arthroplasty, elbow, wrist and hand procedures.

Our anesthesiologist customers see the strong advantages of using brachial plexus and other field blocks as a vehicle for shifting procedures to the ASC setting by replacing antiquated pumps and catheters, which often become dislodged and prevent a procedure from taking place in a 23-hour site of care.

Additionally, the ASC environment is an area where EXPAREL reimbursement is consistently improving as payers and self-insured employers continue to drive the shift from inpatient to outpatient care for a variety of surgeries.

Abdominal and Colorectal

After having success with the brachial plexus block, anesthesiologists typically seek to broaden their EXPAREL use with other field blocks.

TAP blocks are a significant market where EXPAREL is providing long-acting pain control in the abdominal region and supporting the migration of these procedures to the ASC setting.

We expect the expanding use of EXPAREL in the estimated six million abdominal and colorectal procedures that occur annually in the U.S.

to be a significant growth driver.

Women’s Health

There is a significant and growing demand among women for managing pain with non-opioid options.

Opioid addiction in women is growing at an alarming rate and studies have shown that women are 40% more likely than men to become newly persistent users of opioids following surgery.

Women’s Health continues to be an important source of growth as anesthesia-driven EXPAREL-based TAP and Pectoralis, or PEC, blocks take hold as institutional protocol for C-section, abdominoplasty, gynecologic oncology, mastectomy and breast reconstruction procedures.

Cardiothoracic

Cardiothoracic surgery is considered one of the most painful types of surgical procedures for both open and minimally invasive procedures.

As a result, opioids are widely used, but are often inadequate.

Poorly controlled postoperative pain leads to the development of chronic persistent pain in as many as 40% of these patients and persistent opioid use after surgery is seen in over 10% of such patients.

Regional anesthesia approaches have been evolving, with EXPAREL replacing thoracic epidurals as an alternative method of producing long-lasting analgesia.

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| 2020 Form 10-K | Page 11

EXPAREL Dosing, Volume Expansion and Admixing with Bupivacaine HCl

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Bupivacaine HCl may be administered immediately before EXPAREL or admixed in the same syringe.

EXPAREL Label Expansion Studies

EXPAREL Health Economic Benefits

In addition to being efficacious and safe, we believe that EXPAREL provides health economic benefits that play an important role in formulary decision-making that are often overlooked.

Several members of our management team have extensive experience applying health economic outcomes research to support commercial success.

Our strategy is to work directly with the senior leadership of our hospital and ASC customers, integrated health networks, quality improvement organizations, key opinion leaders, or KOLs, in the field of postsurgical pain management and leading influencer hospitals to provide them with retrospective and prospective studies to demonstrate the economic benefits of EXPAREL.

Third Molar (Wisdom Tooth) Procedures

In September 2017, we announced a collaboration with Aetna, one of the nation’s leading diversified health care benefits companies, with the support of AAOMS.

This national program aims to reduce the number of opioid tablets dispensed to patients undergoing impacted third molar (wisdom tooth) extractions by at least 50% through the utilization of EXPAREL to provide prolonged non-opioid postsurgical pain control.

Aetna now includes the cost of EXPAREL as a covered expense for impacted third molar extractions performed by surgeons who have completed training on use of the product.

These facts suggest that there is a dangerous accumulation of opioids in the home, which are available for potential diversion or misuse.

EXPAREL Label Expansion

In December 2019, we reported positive topline results from our Phase 3 registration study (known as “PLAY”) of EXPAREL administered as a single-dose infiltration in pediatric patients undergoing spinal or cardiac surgeries.

Overall findings were consistent with the pharmacokinetic and safety profiles for adult patients with no safety concerns identified at a dose of 4 mg/kg.

We believe the results from this study will provide the foundation for an sNDA submission in the first half of 2020 to the FDA seeking expansion of the EXPAREL label to include children aged six and over.

We are also working with the FDA to finalize a regulatory pathway to expand the EXPAREL label to include EXPAREL administered as a nerve block in the pediatric setting.

Based on the positive data from the PLAY study, we submitted an sNDA to the FDA seeking expansion of the EXPAREL label to include single-dose infiltration to provide postsurgical analgesia in children aged six and over.

In August 2020, the FDA accepted our sNDA and provided a Prescription Drug User Fee Act, or PDUFA, action date of March 22, 2021.

The PLAY study enrolled 98 patients to evaluate the pharmacokinetics and safety of EXPAREL for two patient groups:

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In agreement with the FDA, the primary and secondary objectives of the PLAY study were to evaluate the pharmacokinetics and safety of EXPAREL, respectively.

The full study results will be submitted for publication in the peer-reviewed medical literature later this year.

The EMA has agreed that the PLAY study will meet our pediatric requirement in the E.U.

for patients aged 6 to 17.

The full study results will be submitted for publication in the peer-reviewed medical literature.

We are working with the FDA to identify an appropriate clinical program for EXPAREL administered as a nerve block in the pediatric setting and have an agreed upon Pediatric Investigation Plan with the EMA for EXPAREL in the E.U.

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| 2020 Form 10-K | Page 12

negotiations with the FDA and the EMA for clarity on other pediatric study obligations.and are working with both agencies to synchronize our pediatric clinical studies as much as possible between the two regions.

Nerve Block in Lower Extremity Surgery

We have initiated a Phase 3 study for nerve block in lower extremity surgeries (known as “STRIDE”) that is comparing an EXPAREL nerve block in lower extremity surgeries to a bupivacaine lower extremity nerve block in patients undergoing foot and ankle surgeries.

We believe positive results from this study would support an sNDA submission seeking label expansion to include lower extremity nerve blocks.

We believe positive results from this study will support an sNDA submission seeking label expansion to include lower extremity nerve blocks.

A filing strategy was agreed to with the FDA and we intend to file a variation with the EMA.

We believe the addition of this indication is significant as anesthesia-driven regional approaches using nerve and field blocks continue to expand as institutional protocols.

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We have prioritized Europe, Canada and China.

In Europe, we have secured a positive opinion for our Pediatric Investigation Plan (PIP) and in June 2019 our Marketing Authorization Application, or MAA, was validated by the European Medicines Agency, or EMA.

In Canada, which is a concentrated market driven by four provinces, Health Canada has validated our New Drug Submission.

We do not intend to pursue a commercial partnership to commercialize EXPAREL in Europe or Canada.

In Europe, we were granted marketing authorization by the EC in November 2020 for EXPAREL as a brachial plexus block or femoral nerve block for treatment of post-operating pain in adults and as a field block for treatment of somatic post-operative pain from small- to medium-sized surgical wounds in adults.

We are planning to launch EXPAREL together with iovera° in targeted European countries beginning in the second half of 2021.

The EC approval was based on the results of four pivotal Phase 3 studies that demonstrated improvements in pain reduction and opioid use.

These studies include:

• Lower Extremity Nerve Block Study:

This study assessed the safety and efficacy of EXPAREL as a femoral nerve block in patients undergoing TKA.

Results demonstrated that EXPAREL resulted in a significant reduction in cumulative pain scores over 72 hours compared to placebo.

A higher percentage of patients who received EXPAREL were pain-free, consumed fewer opioids and reported higher satisfaction with their pain control compared with placebo.

• Upper Extremity Nerve Block Study :

This study assessed the safety and efficacy of EXPAREL as an interscalene brachial plexus nerve block in patients undergoing total shoulder arthroplasty or rotator cuff repair.

Results demonstrated that EXPAREL significantly improved pain control and reduced opioid consumption through 48 hours compared with placebo and a standardized pain management protocol alone.

• Hard Tissue Surgery Infiltration Study :

This study assessed the safety and efficacy of EXPAREL administered via infiltration in patients undergoing bunionectomy.

Results demonstrated that EXPAREL significantly reduced pain and opioid consumption compared with placebo over the first 24 hours following surgery than patients administered placebo.

• Soft Tissue Surgery Infiltration Study :

This study assessed the safety and efficacy of EXPAREL administered via infiltration in patients undergoing hemorrhoidectomy.

Results demonstrated that EXPAREL significantly reduced pain compared to placebo at all time points, including a 30% reduction in the cumulative pain scores at 72 hours.

Patients who received EXPAREL consumed significantly fewer opioids than patients administered placebo.

The EC decision is applicable to all 27 E.U.

member states plus the United Kingdom, Iceland, Norway and Liechtenstein.

Despite the United Kingdom’s withdrawal from the E.U.

(“Brexit”), this approval will still be recognized by the United Kingdom Medicines and Healthcare products Regulatory Agency, or MHRA, however we will need to transfer the EMA marketing authorization.

In Canada, Health Canada has validated our New Drug Submission and we remain in labeling discussions.

We do not intend to pursue a commercial partnership to commercialize EXPAREL in either Europe or Canada.

In China, we have an agreement with Nuance Biotech Co.

Ltd., or Nuance, a China-based specialty pharmaceutical company, for the development and commercialization of EXPAREL.

We have received feedback from the National Medical Products Administration, or NMPA, in China and we are preparing for a meeting with the NMPA in 2020 to finalize our regulatory path forward.

The iovera° system

The iovera° system is highly complementary to EXPAREL as a non-opioid therapy that delivers cryoanalgesia via a handheld device to alleviate pain by disrupting pain signals being transmitted to the brain from the site of injury or surgery.

Initially, we will focus on two broad patient care opportunities.

The ioveraº system is 510(k) cleared in the U.S.

for the blocking of pain, pain relief and symptoms associated with osteoarthritis of the knee as well as general surgical use.

Our first priority is iovera° and EXPAREL for opioid-sparing pain management for the TKA patient, with iovera° being administered before surgery and EXPAREL administered during surgery.

As many as 30 percent of presurgical patients with end-stage knee osteoarthritis use prescription opioids.

We have completed a pharmacokinetic study requested by the National Medical Products Administration in China and we are planning to submit an Investigational New Drug, or IND, application in support of such a study.

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| 2020 Form 10-K | Page 13

The iovera° system is highly complementary to EXPAREL as a non-opioid therapy that produces cryoanalgesia via a handheld device by disrupting pain signals transmitted to the brain from the site of injury or surgery and alleviates pain.

The iovera° system is 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.

It is also indicated for the relief of pain and symptoms associated with arthritis of the knee for up to 90 days.

Our commercial strategy for iovera° focuses on two broad market segments.

First, iovera° and EXPAREL for opioid-sparing pain management for the TKA patient, with iovera° being administered before surgery and EXPAREL administered during surgery.

We are enrolling patients into our PREPARE study that will evaluate iovera° and EXPAREL for TKA.

As many as 30% of presurgical patients with end-stage knee osteoarthritis use prescription opioids.

With iovera°, our goal is to provide patients with several months of non-opioid pain control to allow them to prepare for surgery with an appropriate regimen.

We also believe that EXPAREL for surgical pain control and EXPAREL plus iovera° for postsurgical pain control could support rapid functional recovery.

We also believe that EXPAREL plus iovera° for postsurgical pain control could support rapid functional recovery.

The second target market is iovera° for osteoarthritis patients who have failed conservative treatments, such as non-steroidal anti-inflammatory drugs or viscosupplementation, and are seeking drug-free, opioid-free, surgery-free pain management for several months.

We are targeting patients who are seeking an active lifestyle, as well as patients who desire to delay surgery for personal reasons.

We are targeting patients who are seeking an active lifestyle, as well as patients who desire to delay surgery for personal or medical reasons.

Osteoarthritis of the Knee

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Surgical intervention is typically a last resort for patients suffering from osteoarthritis of the knee.

In one study, the majority of the patients suffering from osteoarthritis of the knee experienced pain relief beyond 150 days after being treated with iovera°.

In one study, the majority of the patients suffering from osteoarthritis 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 was significantly lower at 72 hours (p<0.05), 6 weeks (p<0.05) and 12 weeks (p<0.05), with an overall 35 percent reduction in daily morphine equivalents across the 12-week postoperative period in the iovera° treatment group.

• 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.

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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 several months as the nerve regenerates over time;

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

• iovera° is repeatable;

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We will be investing in key clinical studies to demonstrate the synergy of iovera° and EXPAREL to manage pain while reducing or eliminating opioids.

Our initial focus will be iovera° and EXPAREL as a multimodal solution for TKA.

Product Pipeline

Given the proven safety, flexibility and customizability of our DepoFoam platform for acute, sub-acute and chronic pain applications, we have several DepoFoam-based products in preclinical development.

Following data readouts from animal and other feasibility studies for these candidates, we have prioritized two programs for clinical development:

(i) the intrathecal delivery of a DepoFoam-based analgesic for acute and chronic pain and (ii) DepoDexmedetomidine, a sedative-analgesic for end-of-life pain and painful conditions in the elderly.

Following data readouts from preclinical and feasibility studies for these candidates, we have prioritized two programs for clinical development:

(i) a DepoFoam-based

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| 2020 Form 10-K | Page 14

analgesic for acute and chronic pain using epidural delivery and (ii) other DepoFoam-based clinical candidates targeting inflammation for chronic pain opportunities.

We plan to invest in clinical initiatives to broaden the scope of iovera° applications and improve its functionality for current and future end users.

This will be accomplished through enhancements across the product line, which is comprised of single-use disposable units as well as non-disposable handheld devices.

In parallel, our business development team continues to pursue innovative acquisition targets that align with our strategy and are complementary to EXPAREL and iovera° by thoughtfully pursuing additional opportunities that are of great interest to the surgical and anesthesia audiences we are already calling on today.

Our goal is to build a portfolio of customer-focused non-opioid and regenerative health solutions to improve patients’ journeys along the neural pain pathway.

In parallel, our business development team continues to pursue innovative acquisition targets that are complementary to EXPAREL and iovera° and are of great interest to the surgical and anesthesia audiences we are already calling on today.

We believe our leadership position in opioid-sparing pain control provides us with a significant opportunity to build a differentiated portfolio to improve the patient journey along the neural pain pathway.

Sales and Marketing

We have built our marketing and sales organization to commercialize our products.

Our primary target audiences are healthcare practitioners who influence pain management decisions including anesthesiologists, surgeons, pharmacists and nurses.

We have built our sales and marketing organization to commercialize our products.

Our primary target audiences are healthcare practitioners who influence pain management decisions including anesthesiologists, surgeons, pharmacists and registered nurses.

Our field team, consisting of sales representatives, account managers, scientific and medical affairs personnel and reimbursement and market access professionals, executes on a full range of activities to broaden the use of our non-opioid products for pain management, including:

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• facilitating reimbursement and the shift of procedures to hospital outpatient and ASC sites of care.

Pacira Innovation and Training Center of Tampa

In October 2020, we announced the grand opening of the Pacira Innovation and Training center of Tampa (the “PITT”).

We designed this facility to help advance clinician understanding of the latest local, regional and field block approaches for managing pain.

The PITT provides an unparalleled training environment for healthcare providers working to reduce or eliminate patient exposure to opioids.

The PITT is a fully adaptable environment and is equipped with state-of-the-art technology and audio/visual capabilities to support a full range of educational events, such as presentations and hands-on workshops.

The PITT 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 the EXPAREL programs, we are hosting ongoing workshops to train new users on best practice techniques for iovera° administration at the PITT.

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.

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| 2020 Form 10-K | Page 15

The PITT also serves as a venue for national anesthesia provider organizations to host their own workshops and training sessions.

DePuy Synthes Sales Inc.

In January 2017, we entered into a co-promotion agreement with DePuy Synthes, part of the Johnson & Johnson family of companies, to market and promote the use of EXPAREL for orthopedic procedures in the U.S.

Through this collaboration, we believe we have accelerated EXPAREL growth by quickly leveraging the broad reach of DePuy Synthes and their established relationships and scale within hospitals and ASCs.

DePuy Synthes field representatives, specializing in joint reconstruction, spine, sports medicine, trauma and cranio-maxillofacial (CMF) procedures, collaborate with, and supplement, our field teams by expanding the reach and frequency of EXPAREL education in the hospital surgical suite and ambulatory surgery center settings.

DePuy Synthes is also including EXPAREL in their Orthopedic Episode of Care Approach for health systems and surgeons, and is including EXPAREL in all of their professional education programs.

In addition to supporting orthopedic specialties, we are focusing on soft tissue surgeons in key specialties and anesthesiologists and we continue to act as the overall EXPAREL account manager.

We will also work with DePuy Synthes to improve procedure-specific patient care and to then rapidly communicate opportunities to utilize EXPAREL-based multimodal pain strategies to minimize opioids and improve patient satisfaction and hospital economics.

DePuy Synthes receives commissions on sales of EXPAREL under the agreement, subject to conditions, limitations and adjustments.

The initial term of the agreement began on January 24, 2017 and ends on December 31, 2021, with the option to extend the agreement in 12-month increments upon the parties’ mutual agreement, subject to certain conditions.

We and DePuy Synthes have mutual termination rights under the agreement, subject to certain terms, conditions, and notice;

provided that neither party may terminate the agreement, without cause, within three years of the effective date of the agreement.

We also have additional unilateral termination rights under certain circumstances.

The agreement contains customary representations, warranties, covenants and confidentiality provisions, and mutual indemnification obligations.

DePuy Synthes is also subject to certain obligations and restrictions, including required compliance with certain laws and regulations and our policies, in connection with fulfilling their obligations under the agreement.

In July 2020, we announced the conclusion of a co-promotion agreement with DePuy Synthes Sales, Inc., or DePuy Synthes, part of the Johnson & Johnson family of companies to market and promote the use of EXPAREL for orthopedic procedures in the U.S.

The collaboration began in January 2017 and concluded in January 2021.

During that time DePuy Synthes field representatives collaborated with the Pacira field teams to support EXPAREL use and education in orthopedic surgical settings.

In addition to partnering with DePuy Synthes in support of orthopedic surgical procedures, Pacira field representatives remained the overall EXPAREL account managers and commercial leads for soft tissue surgeons, anesthesiologists and ASCs.

Through this collaboration we significantly expanded the use of EXPAREL and solidified its role in opioid-sparing protocols across a range of orthopedic procedures.

Our decision to conclude the partnership was due to the evolution of orthopedic practice from an inpatient hospital experience to the ambulatory setting with anesthesia-driven regional approaches playing an increasingly essential role.

This growing market is already served by our field-based teams.

Other Agreements

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In April 2019, we completed the MyoScience Acquisition.

The consideration included an initial cash payment of $120.0 million, reduced by $1.0 million for post-closing purchase price adjustments and indemnification obligations incurred to date, plus contingent milestone payments up to an aggregate of $100.0 million.

Upon the completion of the MyoScience Acquisition, we renamed MyoScience to Pacira CryoTech, Inc.

Upon the completion of the MyoScience Acquisition, we renamed MyoScience Pacira CryoTech, Inc.

For more information on the MyoScience Acquisition, refer to Note 5, MyoScience Acquisition , to our consolidated financial statements included herein.

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OviTex Reinforced BioScaffolds (RBSs) are intended for use as a surgical mesh to reinforce and/or repair soft tissue where weakness exists.

In 2019, we made an additional cash investment of $1.6 million in TELA Bio.

During the year ended December 31, 2019, we received a non-cash stock dividend from our investment in the amount of $2.5 million and recognized a loss in the amount of $5.7 million , recognized in the other, net line in our consolidated statements of operations.

In 2019, we made an additional investment of $1.6 million in TELA Bio.

For more information, refer to Note 12, Financial Instruments , to our consolidated financial statements included herein.

GeneQuine Biotherapeutics GmbH

In December 2020, we made an equity investment in GeneQuine Biotherapeutics GmbH, or GeneQuine, a privately held biopharmaceutical company advancing a gene therapy platform for the treatment of osteoarthritis and other musculoskeletal disorders.

GeneQuine’s product candidates are next-generation gene transfer vehicles.

These gene therapy vectors are highly efficient in entering joint cells to confer multi-year gene expression.

Safety of this platform has been demonstrated in several species and is currently being evaluated in an ongoing Phase 1 study.

GeneQuine’s lead gene therapy product candidate, GQ-303 and its analogs are currently in preclinical development as a treatment for osteoarthritis.

These helper-dependent adenoviral gene therapy vectors express proteoglycan 4 (PRG4), a protein that plays an important physiological role in regulating osteoarthritis through lubrication and decreased pain, inflammation and cartilage degeneration.

After intra-articular injection, the vector enters joint cells and turns them into factories to produce sustained therapeutic levels of PRG4 to restore joint homeostasis and provide long-lasting improvement in joint function and pain relief, which has been demonstrated in several in vivo osteoarthritis models.

Under the terms of the agreement, we made an initial investment of $1.2 million and subsequently invested $1.2 million in the form of a convertible note in January 2021.

We will make an additional $4.9 million investment predicated upon GeneQuine achieving certain prespecified near-term milestones related to GQ-303.

Up to $3.0 million of our investment will be in the form of a convertible note.

For more information, refer to Note 12, Financial Instruments , to our consolidated financial statements included herein.

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| 2020 Form 10-K | Page 16

SkyePharma Holdings, Inc.

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The earn-out payments were based on a percentage of net sales of DepoBupivacaine products collected, including EXPAREL, for the term during which such sales were covered by a valid claim in certain patent rights.

The last patents during which a valid claim existed expired on September 18, 2018, and thus, the only potential remaining obligations to Skyepharma are the two above-referenced unmet milestone payments totaling $36.0 million.

The last patents during which a valid claim existed expired on September 18, 2018, and thus, the only potential remaining obligations to Skyepharma are the two unmet milestone payments totaling $36.0 million.

See Note 9, Goodwill and Intangible Assets , to our consolidated financial statements included herein for further information related to the Skyepharma Acquisition.

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RDF has the right to terminate the agreement for an uncured material breach by us, in connection with our bankruptcy or insolvency or if we directly or indirectly oppose or dispute the validity of the assigned patent rights.

DepoCyt(e) was a sustained-release liposomal formulation of the chemotherapeutic agent cytarabine that utilized our DepoFoam technology.

DepoCyt(e) was indicated for the intrathecal treatment of lymphomatous meningitis, a life-threatening complication of lymphoma, a cancer of the immune system.

In June 2017, we discontinued production of DepoCyt ® (U.S.

and Canada) and DepoCyte ® (E.U.) due to persistent technical issues specific to the DepoCyt(e) manufacturing process.

Aratana Therapeutics, Inc.

In December 2012, we entered into an Exclusive License, Development and Commercialization Agreement and related Supply Agreement with Aratana Therapeutics, Inc., or Aratana.

In December 2012, we entered into an Exclusive License, Development and Commercialization Agreement and related Supply Agreement with Aratana Therapeutics, Inc., a wholly owned subsidiary of Elanco Animal Health, Inc., or Aratana.

Under the agreements, we granted Aratana an exclusive royalty-bearing license, including the limited right to grant sublicenses, for the development and commercialization of our bupivacaine liposome injectable suspension product for use in animals.

In August 2016, the FDA’s Center for Veterinary Medicine, or CVM, approved NOCITA ® (bupivacaine liposome injectable suspension) as a local post-operative analgesia for cranial cruciate ligament surgery in dogs.

In August 2018, the FDA’s CVM expanded the NOCITA label to include its use as a peripheral nerve block to provide regional postoperative analgesia following onychectomy in cats.

In June 2019, the FDA’s CVM approved a 10mL vial size for NOCITA.

In August 2016, the FDA’s Center for Veterinary Medicine, or CVM, approved NOCITA ® (bupivacaine liposome injectable suspension), as a local post-operative analgesia for cranial cruciate ligament surgery in dogs (NOCITA is a registered trademark of Aratana).

In August 2018, the CVM expanded the NOCITA label to include its use as a peripheral nerve block to provide regional postoperative analgesia following onychectomy in cats.

In June 2019, the CVM approved a 10mL vial size for NOCITA.

Aratana began purchasing our bupivacaine liposome injectable suspension product in 2016.

In connection with its entry into the license agreement, we received a one-time payment of $1.0 million.

In December 2013, we received a $0.5 million milestone payment under the agreement.

In June 2016, we recorded $1.0 million in milestone revenue for Aratana’s filing of an FDA Administrative New Animal Drug Application, or ANADA, and in August 2016 recorded $1.0 million related to the FDA’s approval of the ANADA.

We are eligible to receive up to an additional aggregate $40.0 million upon the achievement of commercial milestones.

We are eligible to receive up to $40.0 million upon the achievement of commercial milestones.

Aratana is required to pay us a tiered double-digit royalty on certain net sales made in the U.S.

If the product is approved by foreign regulatory agencies for sale outside of the U.S., Aratana will be required to pay us a tiered double-digit royalty on such net sales.

Royalty rates will be reduced by a certain percentage upon the entry of a generic competitor for animal health indications into a jurisdiction or if Aratana must pay royalties to third parties under certain circumstances.

Royalty rates will be reduced by a certain percentage upon the entry of a generic competitor for animal health indications into certain jurisdictions or if Aratana must pay royalties to third parties under certain circumstances.

Either party has the right to terminate the license agreement in connection with (i) an insolvency event involving the other party that is not discharged in a specified period of time;

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Unless terminated earlier pursuant to its terms, the license agreement is effective until July 2033, after which Aratana has the option to extend the agreement for an additional five-year term, subject to certain requirements.

NOCITA ® is a registered trademark of Aratana.

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Nuance Biotech Co.

In June 2018, the Company entered into an agreement with Nuance, a China-based specialty pharmaceutical company, to advance the development and commercialization of EXPAREL in China.

Under the terms of the agreement, the Company agreed to be the sole supplier of EXPAREL to Nuance and has granted Nuance the exclusive rights to develop and commercialize EXPAREL in China.

The Company received an upfront payment of $3.0 million in July 2018 and is eligible to receive future milestone payments of up to $60.0 million that are triggered by filing for and securing regulatory approval(s) and annual sales in China exceeding certain levels.

The Company is also entitled to tiered royalties as a percentage of net sales.

In June 2018, we entered into an agreement with Nuance, a China-based specialty pharmaceutical company, to advance the development and commercialization of EXPAREL in China.

Under the terms of the agreement, we agreed to be the sole supplier of EXPAREL to Nuance and granted Nuance the exclusive rights to develop and commercialize EXPAREL in China.

We received an upfront payment of $3.0 million in July 2018 and are eligible to receive future milestone payments of up to $60.0 million that are triggered by filing for and securing regulatory approval(s) and annual sales in China exceeding certain thresholds.

We are also entitled to tiered royalties as a percentage of net sales.

DepoCyt(e) was a sustained-release liposomal formulation of the chemotherapeutic agent cytarabine that utilized our DepoFoam technology and was indicated for the intrathecal treatment of lymphomatous meningitis, a life-threatening complication of lymphoma, a cancer of the immune system.

In June 2017, we discontinued production of DepoCyt ® (U.S.

and Canada) and DepoCyte ® (E.U.) due to persistent technical issues specific to the DepoCyt(e) manufacturing process.

Significant Customers

We had three wholesalers each comprising 10% or more of our total revenue for the year ended December 31, 2020:

Cardinal Health, Inc., McKesson Drug Company and AmerisourceBergen Health Corporation, which accounted for 34% , 29% and 26% of our revenues, respectively.

Cardinal Health, Inc., McKesson Drug Company and AmerisourceBergen Health Corporation, which accounted for 31%, 31% and 25% of our total revenues, respectively.

These wholesalers process orders for EXPAREL under a drop-ship program.

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We manufacture EXPAREL at our facility in San Diego, California.

This facility is designated as Building 1.

We also have a research and development facility, Building 2, which sits adjacent to Building 1, and a warehouse, Building 7, located within five miles of our manufacturing facilities.

We refer to these three buildings as the Science Center Campus, and together these three buildings consist of approximately 150,000 square feet.

Our manufacturing facilities are inspected regularly and approved for pharmaceutical manufacturing by the FDA and the Environmental Protection Agency (EPA).

They have been inspected and approved previously by the European Medicines Agency, or EMA, and the Medicines and Healthcare Products Regulatory Agency, or MHRA, but are no longer with the discontinuation of DepoCyt(e).

We also have a mixed-use research and development, manufacturing and office facility which sits adjacent to our EXPAREL manufacturing facility, and a warehouse located within five miles of these facilities.

We refer to these three buildings as the Science Center Campus, and together they consist of approximately 195,000 square feet.

Our manufacturing facilities are inspected regularly and approved by the FDA, EMA, MHRA and the Environmental Protection Agency (EPA).

Our iovera° facility in Fremont, California, consists of approximately 20,000 square feet of mixed-use manufacturing, research and development and office space.

We also have a lease for our former DepoCyt(e) production facility in San Diego which is currently idle and expires in August 2020.

We purchase raw materials and components from third-party suppliers to manufacture EXPAREL and iovera°.

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All manufacturing of products, initial product release and stability testing are conducted by us in accordance with Current Good Manufacturing Practices, or CGMP.

Building 1 is an approximately 84,000 square foot structure located on a five-acre site.

Our EXPAREL manufacturing facility at the Science Center Campus is an approximately 84,000 square foot structure located on a five-acre site.

It was custom built as a pharmaceutical research and development and manufacturing facility in 1995.

Activities in this facility include the manufacture of EXPAREL bulk product on dedicated production lines and its fill/finish into vials, microbiological and quality control testing, product storage, development of analytical methods and manufacturing of development products.

We are expanding our EXPAREL manufacturing capacity directly and through agreements with a third-party, Thermo Fisher Scientific Pharma Services, or Thermo Fisher (formerly Patheon UK Limited), as demand for EXPAREL increases, as explained below.

Building 2 is an approximately 45,000 square foot research and development lab and office building located adjacent to Building 1, built in 2003.

This building houses our Science Center related general and administrative functions.

The other half of the building is being used for research and development activities as it includes both laboratories and the building infrastructure necessary to support the formulation, analytical testing, clinical and process development activities for additional commercial product indications and new pipeline products.

Our pilot plant suite for early-stage clinical product production is located in this building.

Our lease for Building 2 expires in October 2020, and in April 2020, we will begin moving into new space in the adjacent Building A (which is also adjacent to Building 1), an approximately 90,000 square foot structure built in 2002.

Building A which will eventually house all of the activities now occurring in Building 2 in addition to future expansion opportunities.

Building 7 is an approximately 21,000 square foot building built in 1988 that serves as the main cGMP warehouse for our San Diego operations, primarily being used for the storage of production materials.

We are expanding our EXPAREL manufacturing capacity directly and through agreements with a third-party, Thermo Fisher, as demand for EXPAREL increases, as explained below.

Our 90,000 square-foot mixed-use research and development, manufacturing and office facility was built in 1990 and is located adjacent to our EXPAREL manufacturing facility.

This building houses our Science Center related research and development activities and general and administrative functions, as it includes both laboratories and the building infrastructure necessary to support the formulation, analytical testing, clinical and process development activities for manufacturing additional commercial product indications and new pipeline products.

Our pilot plant suite for early-stage clinical product production is located in this building and there is additional space for future expansion opportunities.

We also have an approximately 21,000 square foot warehouse built in 1988 that serves as the main CGMP warehouse for our San Diego operations, primarily being used for the storage of production materials.

It contains ambient as well as cold temperature CGMP warehouse storage and also features a quality control clean room for sampling incoming materials.

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Our Fremont, California facility was built in 1998 and has been leased since 2015.

It is dedicated to the iovera° product line and consists of approximately 20,000 square feet of space for manufacturing, quality control, research and development and the warehousing of raw materials and finished goods.

The entire iovera° product line of tips, cartridges and handheld systems are produced as well as developed at this site.

We have expanded our iovera° manufacturing capacity through a third party, Providien Device Assembly, LLC, or Providien, as explained below.

Distribution of our DepoFoam products, including EXPAREL, requires cold-chain distribution, whereby a product must be maintained between specified temperatures.

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Co-Production Facilities

Thermo Fisher Scientific Pharma Services

In April 2014, we and Thermo Fisher entered into a Strategic Co-Production Agreement, Technical Transfer and Service Agreement and Manufacturing and Supply Agreement (the “Thermo Fisher Agreements”) to collaborate in the manufacture of EXPAREL.

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In February 2019, we announced that commercial production of EXPAREL is underway at the first Thermo Fisher suite, and that we are developing a second dedicated suite that is expected to enable another doubling of EXPAREL manufacturing capacity and should be available to begin commercial production in approximately one year from now.

The initial term of the Manufacturing and Supply Agreement is 10 years from the date of FDA approval of the initial manufacturing suite, which was received in May 2018.

The initial term of the Manufacturing and Supply Agreement is 10 years from the date of FDA approval of the first manufacturing suite, which was received in May 2018.

We pay fees to Thermo Fisher for their operation of the manufacturing suites and the amount of EXPAREL produced by Thermo Fisher.

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Either party may terminate the Manufacturing and Supply Agreement in the event of the breach or bankruptcy of the other party.

Providien Device Assembly

In January 2020, we and Providien entered into a Manufacturing and Supply Agreement (the “Providien Agreement”) to collaborate in the manufacture of iovera° tips at Providien’s Tijuana, Mexico facility.

The initial term of the Providien Agreement is five years.

We will pay fees based on the amount of iovera° tips delivered by Providien.

The Providien Agreement may be terminated by either party upon one years’ written notice without cause.

We may terminate the Providien Agreement upon thirty days’ written notice in the event that iovera° is withdrawn from the market or no longer sold by us.

Either party may terminate the Providien Agreement in the event of the breach or bankruptcy of the other party.

Intellectual Property and Exclusivity

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and foreign patent applications related to our proprietary technology, inventions and improvements that are important to the development of our business.

As of December 31, 2019 , there are over nine families of patents and patent applications relating to various aspects of the DepoFoam delivery technology and 25 families of patents and patent applications relating to various aspects of the technology used by iovera°.

As of December 31, 2020, there are over seven families of patents and patent applications relating to various aspects of the DepoFoam delivery technology and 25 families of patents and patent applications relating to various aspects of the technology used by iovera°.

Patents have been issued in numerous countries, with an emphasis on the North American, European and Japanese markets.

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patents had a term of 17 years from the grant date.

Our issued patents expire at various dates in the future, as discussed below, with the last currently issued patent for the DepoFoam delivery technology expiring in 2033 and the last currently issued patent for the iovera° technology expiring in 2037.

Our issued patents expire at various dates in the future, as discussed below, with the last currently issued patent

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for the DepoFoam delivery technology expiring in 2037 and the last currently issued patent for the iovera° technology expiring in 2040.

Patents and Patent Applications for DepoFoam and DepoFoam Products

We received an issue notification from the United States Patent and Trademark Office, or USPTO, stating that a patent relating to product-by-process and process in connection with the production of multivesicular liposomes was issued on March 7, 2017.

This patent is listed on the Orange Book for EXPAREL and includes a patent term adjustment that equates to an expiration date of December 24, 2021.

A patent relating to product-by-process and process in connection with the production of multivesicular liposomes was issued on March 7, 2017.

This patent is listed in the Orange Book for EXPAREL and includes a patent term adjustment that equates to an expiration date of December 24, 2021.

Additionally, we have filed several pending patent applications directed to other important aspects of the EXPAREL technology which, if granted, would provide additional patent protection through 2040 and beyond.

Issued patents for EXPAREL in the U.S.

relating to methods for modifying the rate of drug release of the product candidate and the composition of the product candidate expired in January 2017 and September 2018, respectively.

Pursuant to 35 U.S.C.

§ 156, an application for patent term extension was filed with the USPTO in October 2016 in connection with the regulatory approval of Aratana’s NOCITA.

That application was subsequently withdrawn after the product-by-process patent, referenced above, was issued on March 7, 2017.

In the U.S., a patent relating to the composition of the product was issued in September 2014 and expired in September 2018.

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In the U.S., we also filed a series of patent applications directed to the new manufacturing process.

Seven of the patent applications were issued as patents as of December 2018.

Eight of the patent applications were issued as patents as of December 2020.

Patents that claim the process and apparatus will expire at the latest in November 2033.

One of the patents claims a product made by the process and expires in April 2031.

As of December 31, 2019 , we have four granted patents in China, one granted patent in Japan and one granted patent in Israel, protecting various aspects of the new process, including the methods of using the apparatus and the apparatus itself.

Furthermore, a non-exclusively licensed patent of ours relating to EXPAREL was allowed in Europe with an expiration date in October 2021 and the patent term was extended in the U.S.

until October 2023.

As of December 31, 2020, we have four granted patents in China, one granted patent in Europe, one granted patent in Japan and one granted patent in Israel, protecting various aspects of the new process, including the methods of using the apparatus and the apparatus itself.

Patents and Patent Applications for iovera°

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Additionally, there are several patents and pending patent applications directed to other important aspects of the iovera° technology.

For example, patents covering needle cladding and the probe filtration system are set to expire in 2033 and a patent on the smart tip technology is not set to expire until 2037.

Other applications cover methods of using needles with blunt tips and aspects of cryogenic devices coupled with a neurostimulator for locating nerves.

For example, patents covering needle cladding and the probe filtration system are set to expire in 2033 and patents on the smart tip technology are set to expire between 2034 and 2037.

Other patents and applications cover methods of using needles with blunt tips and aspects of cryogenic devices coupled with a neurostimulator for locating nerves.

We also have three design patent families that cover the current handheld cryogenic device, its charging station dock and combinations thereof.

To obtain coverage of our developing next-generation technology, we filed four new provisional applications in 2019, which if converted and granted, could potentially prevent others from using this next-generation technology until at least 2040.

To obtain coverage of our developing next-generation technology, we filed eight new non-provisional and Patent Cooperation Treaty (PCT) applications in 2020, which if granted, could potentially prevent others from using this next-generation technology until at least 2040.

Trade Secrets and Proprietary Information

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The scale-up and commercial manufacture of DepoFoam-based and iovera° products involve processes, custom equipment and in-process and release analytical techniques that we believe are unique to us.

The expertise and knowledge required to understand the critical aspects of DepoFoam manufacturing steps requires knowledge of both traditional and non-traditional emulsion processing and traditional pharmaceutical production, overlaid with all of the challenges presented by aseptic manufacturing.

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challenges presented by aseptic manufacturing.

The iovera° system relies on manufacturing techniques that are able to provide the precision and tight tolerances required for a self-contained handheld cryogenic device.

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These agreements generally provide that all confidential information developed or made known during the course of the relationship with us be kept confidential and not be disclosed to third parties except in specific circumstances.

In the case of our employees, the agreements also typically provide that all inventions

resulting from work performed for us, utilizing our property or relating to our business and conceived or completed during employment shall be our exclusive property to the extent permitted by law.

In the case of our employees, the agreements also typically provide that all inventions resulting from work performed for us, utilizing our property or relating to our business and conceived or completed during employment shall be our exclusive property to the extent permitted by law.

Where appropriate, agreements we obtain with our consultants also typically contain similar assignment of invention obligations.

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Additional products may be developed for the treatment of acute pain, including new injectable NSAIDs, novel opioids, new formulations of currently available opioids and NSAIDs, long-acting local anesthetics and new chemical entities as well as alternative delivery forms of various opioids and NSAIDs.

Currently EXPAREL also competes with elastomeric pump/catheter devices intended to provide bupivacaine over several days.

Currently EXPAREL also competes with elastomeric pumps/catheter devices intended to provide bupivacaine over several days.

Avanos Medical, Inc.

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Our competitors are continuously engaged in trials and attempts to develop new products or approaches in hopes of capturing the pain management market.

They may succeed in developing, acquiring or licensing on an exclusive basis, technologies that are more effective or less costly than the iovera° system, which could render the iovera° system obsolete and noncompetitive.

They may succeed in developing, acquiring or licensing on an exclusive basis,

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technologies that are more effective or less costly than the iovera° system, which could render the iovera° system obsolete and noncompetitive.

As a result, it is critical that we continue to innovate and to increase marketing efforts in our primary markets.

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Besides pharmaceutical products for pain management, iovera° competes with medical devices that ablate or degenerate peripheral nerves to treat indications such as joint pain, neuralgia and osteoarthritis pain.

Competing products include cryotherapy devices as well as other devices such as cooled radio-frequency ablation devices that block or degenerate

peripheral nerves involved in conducting pain signals.

Competing products include cryotherapy devices as well as other devices such as cooled radio-frequency ablation devices that block or degenerate peripheral nerves involved in conducting pain signals.

Avanos Medical, Inc.

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In the U.S., prescription drug and medical device products are subject to extensive pre- and post-market regulation by the FDA, including regulations that govern the research, development, testing, manufacturing, distribution, safety, efficacy, approval, labeling, storage, record keeping, reporting, advertising and promotion of such products under the Federal Food, Drug and Cosmetic Act, or FDCA, and its implementing regulations.

Outside the U.S., prescription drug and medical device products are regulated by comparable agencies, laws and regulations.

Failure to comply with applicable regulatory requirements in the U.S.

or elsewhere may result in, among other things, refusal to approve pending applications, withdrawal of an approval, warning letters, clinical holds, civil or criminal penalties, recall or seizure of products, injunction, debarment, partial or total suspension of production or withdrawal of the product from the market.

Outside the U.S., prescription drug and medical device products are regulated by comparable agencies (including the EMA and MHRA), laws and regulations.

Failure to comply with applicable regulatory requirements may result in, among other things, refusal to approve pending applications, withdrawal of an approval, warning letters, clinical holds, civil or criminal penalties, recall or seizure of products, injunction, debarment, partial or total suspension of production or withdrawal of the product from the market.

Any agency or judicial enforcement action could have a material adverse effect on the Company.

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• completion of preclinical laboratory and animal testing and formulation studies in compliance with the FDA’s Good Laboratory Practice regulations (21 CFR 58);

submission to the FDA of an Investigational New Drug, or IND, application for human clinical testing, which must become effective before human clinical trials may begin for unapproved use in the U.S.;

• submission to the FDA of an IND application for human clinical testing, which must become effective before human clinical trials may begin for unapproved use in the U.S.;

• approval by an independent Institutional Review Board, or IRB, at each clinical trial site before each trial may be initiated;

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In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin.

Thus, submission of an IND does not by itself automatically result in FDA authorization to commence a clinical trial.

Thus, submission of an

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IND does not by itself automatically result in FDA authorization to commence a clinical trial.

In addition, the FDA requires us to amend an existing IND for each successive clinical trial conducted during product development.

Further, an IRB covering each site proposing to conduct the clinical trial must review and approve the plan for any clinical trial along with informed consent information for subjects before the clinical trial commences at that center.

The IRB also must monitor the clinical trial

until it is completed.

The IRB also must monitor the clinical trial until it is completed.

The FDA, the IRB or the sponsor may suspend a clinical trial at any time, on various grounds, including a finding that the subjects or patients are being exposed to an unacceptable health risk.

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Clinical trials involve the administration of the product candidate to healthy volunteers or patients having the disease being studied under the supervision of qualified investigators in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent for their participation in any clinical trial.

Sponsors of clinical trials generally must register at the NIH-maintained website (www.clinicaltrials.gov) and report key findings and parameters.

Sponsors of clinical trials generally must register at the National Institutes of Health (NIH)-maintained website (www.clinicaltrials.gov) and report key findings and parameters.

For purposes of an NDA submission and approval, typically, the conduct of human clinical trials occurs in the following three pre-market sequential phases, which may overlap or be combined:

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Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, sponsors submit the results of product development, preclinical studies and clinical trials to the FDA as part of an NDA requesting approval to market the product for one or more indications.

NDAs must also contain extensive information relating to the product’s pharmacology, chemistry, manufacture, controls and proposed labeling, among other things.

In addition, 505(b)(2) applications must contain a patent certification for each patent listed in FDA’s “Orange Book” that covers the drug

referenced in the application and upon which the third-party studies were conducted.

NDAs must also contain extensive information relating

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to the product’s pharmacology, chemistry, manufacture, controls and proposed labeling, among other things.

In addition, 505(b)(2) applications must contain a patent certification for each patent listed in the FDA’s Orange Book that covers the drug referenced in the application and upon which the third-party studies were conducted.

For some drugs, the FDA may require Risk Evaluation and Mitigation Strategies, or REMS, which could include medication guides, physician communication plans or restrictions on distribution and use, such as limitations on who may prescribe the drug or where it may be dispensed or administered.

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If the FDA accepts the submission for substantive review, the FDA typically reviews the NDA in accordance with established timeframes.

Under the Prescription Drug User Fee Act, or PDUFA, the FDA establishes goals for NDA review time through a two-tiered classification system:

Under PDUFA, the FDA establishes goals for NDA review time through a two-tiered classification system:

Priority Review and Standard Review.

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The first pathway, a pre-market notification (the 510(k) process), requires demonstration that the new device is substantially equivalent to an already legally marketed medical device.

The second pathway, known as pre-market approval, or PMA, requires an independent demonstration that a medical device is safe and effective for its intended use.

The second pathway, a PMA, requires an independent demonstration that a medical device is safe and effective for its intended use.

In general, pre-market approvals require a much longer time horizon and can be much more expensive than obtaining clearance through the 510(k) process.

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The MyoScience business focus shifted to pain management in 2014, and since then there have been a number of advancements that led to three additional 510(k) submissions and clearances to support iovera° and the subsequent growth of the iovera° product line.

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A PMA must be submitted to the FDA if it is determined that the device is not eligible for the 510(k) clearance process.

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If the patent owner or NDA holder brings a patent infringement lawsuit within 45 days of such notice, the 505(b)(2) application cannot be approved for 30 months or until the 505(b)(2) applicant prevails, whichever is sooner.

If the 505(b)(2) applicant loses the patent infringement suit, FDA may not approve the 505(b)(2) application until the patent expires, plus any period of pediatric exclusivity.

In the NDA submissions for our product candidates, we intend to follow the development and approval pathway permitted under the FDCA that we believe will maximize the commercial opportunities for these product candidates.

If the 505(b)(2) applicant loses the patent infringement suit, the FDA may not approve the 505(b)(2) application until the patent expires, plus any period of pediatric exclusivity.

In any future NDA submissions for our product candidates, we intend to follow the development and approval pathway permitted under the FDCA that we believe will maximize the commercial opportunities for these product candidates.

Post-Approval Requirements

Pharmaceuticals

After approval, the NDA sponsor must comply with comprehensive requirements governing, among other things, drug listing, recordkeeping, manufacturing, marketing activities, product sampling and distribution, annual reporting and adverse event reporting.

Additionally, adverse events must be reported to the FDA in a timely fashion, and pharmacovigilance programs to proactively look for adverse events are mandated by the FDA.

If new safety issues are identified following approval, the FDA can require the NDA sponsor to revise the approved labeling to reflect the new safety information;

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In addition, drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and state agencies and are subject to periodic unannounced inspections by the FDA and these state agencies for compliance with CGMP requirements.

Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented.

FDA regulations also require investigation

and correction of any deviations from cGMP and impose reporting and documentation requirements upon us and any third-party manufacturers that we may decide to use.

Changes to the manufacturing process are

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strictly regulated and often require prior FDA approval before being implemented.

FDA regulations also require investigation and correction of any deviations from CGMP and impose reporting and documentation requirements upon us and any third-party manufacturers that we may decide to use.

If after approval the FDA determines that the product does not meet applicable regulatory requirements or poses unacceptable safety risks, the FDA may take other regulatory actions, including initiating suspension or withdrawal of the NDA approval.

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In April 2018, the FDA approved an expansion of the label for EXPAREL to include interscalene brachial plexus nerve block.

The new indication statement in the label for EXPAREL now reads:

indication statement in the label for EXPAREL as approved by the FDA now reads:

“EXPAREL is indicated for single-dose infiltration in adults to produce postsurgical local analgesia and as an interscalene brachial plexus nerve block to produce postsurgical regional analgesia.

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• Medical device reporting regulations, which require that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur.

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Failure to comply with regulatory requirements can result in enforcement action by the FDA, which may include any of the following sanctions:

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and is evaluated by the Committee for Medicinal Products for Human Use, or CHMP, the expert scientific committee of the EMA.

If the CHMP determines that the marketing application fulfills the requirements for quality, safety and efficacy, it will submit a favorable opinion to the European Commission, or EC.

If the CHMP determines that the marketing application fulfills the requirements for quality, safety and efficacy, it will submit a favorable opinion to the EC.

The CHMP opinion is not binding, but is typically adopted by the EC.

A marketing application approved by the EC is valid in all member states.

A marketing application approved by the EC is valid in all E.U.

member states and is recognized by the MHRA.

The centralized procedure is required for all biological products, orphan medicinal products and new treatments for neurodegenerative disorders, and it is available for certain other products, including those which constitute a significant therapeutic, scientific or technical innovation.

As with FDA approval, we may not be able to secure regulatory approvals in Europe in a timely manner, if at all.

As with FDA, EMA or MHRA approval, we may not be able to secure additional regulatory approvals in a timely manner, if at all.

Additionally, as in the U.S., post-approval regulatory requirements, such as those regarding product manufacture, marketing or distribution would apply to any product that is approved in Europe, and failure to comply with such obligations could have a material adverse effect on our ability to successfully commercialize any product.

In addition to regulations in Europe and the U.S., we will be subject to regulations governing clinical trials, product approvals, and commercial distribution in Canada, China and any other jurisdictions in which EXPAREL, iovera° or any other future product is approved.

In addition to regulations in Europe and the U.S., we will be subject to regulations governing clinical trials, product approvals, and commercial distribution in the United Kingdom, Canada, China and any other jurisdictions in which EXPAREL, iovera° or any other future product is approved.

Third-Party Payer Coverage and Reimbursement

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Government payer programs, including Medicare and Medicaid, private health care insurance companies and managed care plans may deny coverage or reimbursement for a product or therapy in whole or in part if they determine that the product or therapy is not medically appropriate or necessary.

Also, third-party payers have attempted to control costs by limiting coverage and the amount of reimbursement for particular

procedures, medical devices or drug treatments.

The United States Congress and state legislatures from time to time propose and adopt initiatives aimed at cost containment that could impact our ability to sell our products at a price level high enough to realize an appropriate return on our investment, which would materially impact our results of operations.

In March 2010, President Obama signed into law the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act (collectively, the “Affordable Care Act”), a sweeping law intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for healthcare and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms.

Also, third-party payers have attempted to control costs by limiting coverage and the amount of reimbursement for particular procedures, medical devices or drug treatments.

Congress and state legislatures from time to time propose and adopt initiatives aimed at cost containment that could impact our ability to sell our products at a price level high enough to realize an appropriate return on our investment, which would materially impact our results of operations.

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and abuse, add new transparency requirements for healthcare and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms.

The Affordable Care Act revised the definition of “average manufacturer price” for reporting purposes, which could increase the amount of Medicaid drug rebates owed to states by pharmaceutical manufacturers for covered outpatient drugs.

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In the past, based on our clinical trial program for EXPAREL, the FDA granted three years of marketing exclusivity to EXPAREL, which expired in October 2014.

In Europe, manufacturers qualify for 8 years of data exclusivity upon marketing authorization approval and an additional two years of market exclusivity, for a total of 10 years of regulatory exclusivity.

Manufacturing Requirements

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We and any third-party manufacturers we engage or with which we partner are also subject to periodic inspections of facilities by the FDA and other authorities, including procedures and operations used in the testing and manufacture of our products to assess our compliance with applicable regulations.

Failure to comply with these and other statutory and regulatory requirements subjects a manufacturer to possible

legal or regulatory action, including warning letters, the seizure or recall of products, injunctions, consent decrees placing significant restrictions on or suspending manufacturing operations and civil and criminal penalties.

Failure to comply with these and other statutory and regulatory requirements subjects a manufacturer to possible legal or regulatory action, including warning letters, the seizure or recall of products, injunctions, consent decrees placing significant restrictions on or suspending manufacturing operations and civil and criminal penalties.

Adverse experiences with the product or product complaints must be reported and could result in the imposition of market restrictions through labeling changes or in product removal.

Product approvals may be withdrawn if compliance with regulatory requirements is not maintained or if problems concerning safety or efficacy of the product occur following approval.

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Regulations Pertaining to Sales and Marketing

We are subject to various federal and state laws pertaining to health care “fraud and abuse,” including anti-kickback laws and false claims laws.

Anti-kickback laws generally prohibit a prescription drug manufacturer from soliciting, offering, receiving, or paying any remuneration to generate business, including the purchase or prescription of a particular drug or medical device.

Anti-kickback laws generally prohibit a prescription drug or medical device manufacturer from soliciting, offering, receiving, or paying any remuneration to generate business, including the purchase or prescription of a particular drug or device.

Although the specific provisions of these laws vary, their scope is generally broad and there may be no regulations, guidance or court decisions that clarify how the laws apply to particular industry practices.

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Outside the U.S., other countries have implemented requirements for disclosure of financial interactions with healthcare providers and additional countries may consider or implement such laws.

In April 2015, we received a subpoena from the U.S.

Department of Justice, U.S.

Attorney’s Office for the District of New Jersey, requiring the production of a broad range of documents pertaining to marketing and promotional practices related to EXPAREL.

We are cooperating with the government’s inquiry.

Refer to Item 3, Legal Proceedings , for an update related to this matter.

Healthcare Privacy and Security Laws

We may be subject to, or our marketing activities may be limited by, the Health Insurance Portability and Accountability Act, or HIPAA and its implementing regulations, which established uniform standards for certain “covered entities” (healthcare providers, health plans and healthcare clearinghouses) governing the conduct of certain electronic healthcare transactions and protecting the security and privacy of protected health information.

The American Recovery and Reinvestment Act of 2009, commonly referred to as the economic stimulus package, included sweeping expansion of HIPAA’s privacy and security standards called the Health Information Technology for Economic and Clinical Health Act, or HITECH, which became effective on February 17, 2010.

Among other things, the new law makes HIPAA’s privacy and security standards directly applicable to “business associates”—independent contractors or agents of covered entities that receive or obtain protected health information in connection with providing a service on behalf of a covered entity.

Among other things, HITECH makes HIPAA’s privacy and security standards directly applicable to “business associates”—independent contractors or agents of covered entities that receive or obtain protected health information in connection with providing a service on behalf of a covered entity.

HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees and costs associated with pursuing federal civil actions.

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While we believe we are in compliance with applicable environmental regulations, the failure to fully comply with any such regulations could result in the imposition of penalties, fines and/or sanctions which could have a material adverse effect on our business.

As of December 31, 2019 , we had 606 employees.

Cybersecurity

We operate a risk-based cybersecurity program dedicated to protecting the confidentiality, integrity and availability of our information.

We utilize a layered approach in protecting against, and the detection of, cyber-attacks, and leverage outside

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partnerships to gain intelligence on threats and continue to adjust our protection mechanisms to be effective.

We also use state-of-the-art technology to monitor systems for anomalous behavior.

In the event an incident were to occur, a Security Incident Response Team would be convened that consists of members from many functions, including legal counsel.

Additionally, we carry a Cyber Insurance policy to help cover investigation and mitigation expenses.

Although we have numerous controls to protect against common attacks, some attacks may still be effective.

Our controls are designed to detect, triage and eradicate these attacks.

Over the past three years, there have been no known material breaches, and no expenses related to the investigation of such breaches.

Human Capital

Pacira Core Values

We are a team of dedicated and highly talented professionals focused on driving improved patient outcomes with opioid-reducing strategies.

We are an organization built on high ethical standards, an unwavering commitment to patients and transparent communications.

We have a drive and a desire to improve the world around us and make a meaningful difference in the lives of patients, families, communities and society.

The six core values that underpin everything we do are:

Their safety and welfare are our top priority at all times

Our greatest asset

We are passionate about what we do

Our thoughts are shared generously

Building trust is essential

The cornerstone of our business success

Total Rewards

In order to attract and retain talent, we maintain broad-based benefits that are provided to all employees, including our 401(k) retirement plan with an employer matching contribution, employee stock purchase plan, flexible spending accounts, medical, dental and vision care plans, healthcare and dependent care savings accounts, life insurance, short- and long-term disability policies, paid vacation, paid sick time and paid company holidays.

Additionally, we reward employees driving significant value creation with a variety of long-term and short-term incentives including a recognition platform, annual performance bonuses, stock options, restricted stock units and a long-term performance cash incentive.

We encourage our employees to give back in their communities and offer one paid day off per year to volunteer.

We regularly benchmark our rewards programs, adjusting as needed, to ensure our total rewards are competitive.

We are committed to paying all our employees a fair and living wage.

Talent Management

We have a desire to cultivate and develop our future leaders.

We regularly assess and identify our emerging talent and support their development with programs including leadership development, executive coaching and mentoring.

We track turnover and employee engagement among other metrics, and conduct stay and exit interviews to ensure our talent strategy serves our goal of attracting, developing and retaining top talent to serve as our future leaders and stewards of our vision.

We offer targeted selection training for interviewers to ensure a consistent methodology applied in identifying and hiring the best candidates for open positions.

We offer a number of critical skills programs including management skills training for people managers, as well as project management and communications training.

Employee Wellbeing, Health and Safety

Pacira is committed to the total wellbeing of our employees and their families.

We offer a range of benefits designed to meet individual needs and help employees and their families live healthy lives.

This includes a variety of tools to promote total wellbeing in the areas of health, wealth, work and life to keep our employees and their families healthy, lower their healthcare costs and reduce stress.

For example, we provide access to free biometric screenings, an employee assistance program, or EAP, and host in-person and webinar trainings on stress management and other EAP benefits, access to telemedicine including mental health visits, a health advocate service to help employees and their families navigate the healthcare system, activity challenges and more.

Benefits that protect financial wellbeing are also provided, including but not limited to:

a paid parental leave benefit, insurance to help protect assets during times of short- and long-term disability, life insurance and accidental death and dismemberment insurance, financial education seminars on savings, debt and other financial topics, access to discounts on a

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variety of products and services and an incentive to engage in a new or maintain a wellbeing activity.

In addition, we maintain a recognition program based on our core values, known as Celebrate , through which we recognize each other’s commitment to making a meaningful difference for our patients and communities and create a shared culture where everyone is responsible for living up to and sustaining our core values.

We have a formal Environmental Health and Safety (EHS) Program.

It is our policy that everyone is entitled to a safe and healthful place to work.

We recognize that accident prevention, employee wellness and efficiency of operations are directly related to quality, production and cost.

Pacira operates its facilities in a manner that protects the health of its employees and minimizes the impact of its operations on the environment.

Diversity, Equity and Inclusion

We are committed to intentionally cultivating a culture of inclusion where all feel welcomed and valued for their backgrounds, perspectives and experiences.

We hold one another accountable to promote trust and transparency in support of our communities and collective purpose.

In support of this diversity, equity and inclusion vision, we have developed a strategy and multi-year roadmap, prioritizing education and training.

Our executive team and senior leaders have received training on Unconscious Bias and Inclusive Leadership.

Additionally, we have established a project team and employee council to shape our strategy around four key areas:

leadership development, diversity recruiting, culture and communications.

We are committed to evaluating our people processes to ensure we are attracting, developing, promoting and retaining diverse talent.

COVID-19 Pandemic

The health and safety of our employees has always been important to us, which is why we took responsible action in response to the COVID-19 pandemic.

We covered the cost of COVID-19 testing and treatment for our employees and covered family members under our benefit plans and extended our paid sick leave for COVID-related absences.

We amended our 401(k) savings plan to enhance loan eligibility and repayment terms and to permit certain distributions.

We implemented additional safety protocols and guidelines at our manufacturing sites and required our non-manufacturing personnel to work from home, including our field sales force and clinical education teams which continue to support our customers remotely.

With the reopening of many states, the ability of our sales representatives to renew their in-person engagement efforts, in conjunction with these remote efforts, has occurred across all sites of care, with more focus on physician offices and ambulatory surgical centers.

Our offices have since re-opened on a voluntary basis with strict safety and hygiene guidelines implemented, and we continue to support remote working as appropriate.

As of December 31, 2020, we had 624 employees, all of which are full-time.

All of our employees are located in the U.S.

except for nine located in England and one located in the Netherlands.

except for eight located in England and one located in the Netherlands.

None of our employees are represented by a labor union, and we consider our current employee relations to be good.

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In addition, we regularly use our corporate website to post information regarding our business, product development programs and governance, and we encourage investors to use our website, particularly the information in the sections entitled “Investors” and “News,” as a source of information about us.

The foregoing references to our corporate website are not intended to, nor shall they be deemed to, incorporate information on our website into this Annual Report by reference.

The foregoing references to our corporate website are not intended to, nor shall they be deemed to, incorporate information on our corporate website into this Annual Report by reference.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business