What changed in this filing

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Item 1. Business

2022-02-28 compared with 2021-03-01 · 553 added, 370 removed, 507 unchanged (65% of the section changed)

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

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

In April 2019, we acquired MyoScience, a privately held medical technology company (referred to herein as the “MyoScience Acquisition”) and in November 2021, we acquired Flexion Therapeutics, Inc., a publicly traded biopharmaceutical company (referred to herein as the “Flexion 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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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.

Our principal executive offices are located in Tampa, Florida.

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.

In addition, references in this Annual Report to DepoCyt(e) mean DepoCyt when discussed in the context of the U.S.

and Canada and DepoCyte when discussed in the context of the E.U.

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

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 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 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 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.

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

For the years ended December 31, 2020, 2019 and 2018, net product sales of EXPAREL accounted for 96%, 97% and 98% of our total revenues, respectively.

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

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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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:

* 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 the global leader in delivering innovative non-opioid pain management and regenerative health solutions.

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

• Expanding the use of EXPAREL and iovera° for opioid-sparing pain management :

As the only opioid-free, long-acting local and regional analgesic approved for infiltration, field blocks and interscalene brachial plexus nerve block, we believe EXPAREL is well-positioned to continue delivering strong sustainable growth from multiple sources.

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.

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

Pacira ® , EXPAREL ® , ZILRETTA ® , iovera° ® , the Pacira logo and other trademarks or service marks of Pacira appearing in this Annual Report are the property of Pacira, and when first used in each part of this report, include the ® symbol.

This Annual Report contains additional trade names, trademarks and service marks of other companies, which may or may not appear with the ® or ™ symbol.

The absence of these symbols does not in any way imply that the respective owner(s) will not assert their rights to such marks to the fullest extent under applicable law.

Our use of trademarks or trade names of other companies should not suggest any endorsement, sponsorship or other relationship with or by such companies.

We are the industry leader in our commitment to non-opioid pain management and providing a non-opioid option to as many patients as possible to redefine the role of opioids as a rescue therapy only.

We are advancing a pipeline of unique, safe, best-in-class products across a variety of therapeutic areas that include acute postsurgical pain;

acute and chronic osteoarthritis, or OA, pain of the knee;

low back and other areas;

spasticity and stellate ganglion block of the sympathetic nerves.

We have three commercialized non-opioid treatments:

EXPAREL ® (bupivacaine liposome injectable suspension), a long-acting, local analgesic currently approved for postsurgical pain management;

ZILRETTA ® (triamcinolone acetonide extended-release injectable suspension), an extended-release, intra-articular, corticosteroid injection indicated for the management of OA knee pain;

and iovera° ® , a novel, handheld device for delivering immediate, long-acting, drug-free pain control using precise, controlled doses of cold temperature to a targeted nerve.

Flexion Acquisition

On November 19, 2021, we completed the Flexion Acquisition pursuant to an Agreement and Plan of Merger (the “Merger Agreement”), dated as of October 11, 2021, by and among us, Oyster Acquisition Company Inc., a Delaware corporation and wholly owned subsidiary of Pacira (“Purchaser”), and Flexion Therapeutics, Inc., a Delaware corporation (“Flexion”).

Following the completion of a successful tender offer for the shares of Flexion’s common stock, and pursuant to the terms of the Merger Agreement and in accordance with Section 251(h) of the General Corporation Law of the State of Delaware, Purchaser merged with and into Flexion with Flexion surviving as a wholly owned subsidiary of Pacira.

We changed the name of Flexion to Pacira Therapeutics, Inc.

after completing the merger.

As part of the Flexion Acquisition, we acquired ZILRETTA, the first and only extended-release, intra-articular, or IA (meaning in the joint), injection indicated for the management of OA knee pain.

ZILRETTA is a non-opioid therapy that employs a proprietary microsphere technology to provide pain relief.

The addition of ZILRETTA to our innovative non-opioid product portfolio directly aligns with our mission to provide an opioid alternative to as many patients as possible and address medical needs along the neural pain pathway.

The total consideration for the Acquisition was approximately $578.8 million consisting of (i) $448.5 million of cash paid to Flexion shareholders and to settle restricted stock units and certain stock options;

(ii) an $85.1 million cash payment of Flexion debt not to be assumed by us and (iii) $45.2 million of estimated fair value of contingent consideration related to contingent value rights that were issued to Flexion shareholders and certain equity award holders in conjunction with the

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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 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.

• Advancing a pipeline of new clinical candidates :

We are developing a pipeline based on our DepoFoam platform, our established safe and effective multivesicular liposomal drug delivery technology.

DepoFoam consists of microscopic, spherical, lipid-based particles composed of a honeycomb of numerous, non-concentric, internal aqueous chambers containing the encapsulated drug.

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

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.

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Flexion Acquisition.

The consideration is subject to adjustments based on the estimated fair value of the potential milestone payments.

We funded the cash portion of the purchase price with cash on hand.

For more information, see Note 5, Acquisitions , to our consolidated financial statements included herein.

To achieve our goal of global leadership in non-opioid pain management and regenerative health solutions, we are advancing a three-pronged strategy:

• Expanding the use of our opioid-free commercial assets.

The COVID pandemic and opioid crises have intensified the need for opioid alternatives.

In the U.S., EXPAREL is the only opioid-free, long-acting local and regional analgesic approved for infiltration, field blocks and interscalene brachial plexus nerve block to produce local or regional postsurgical analgesia.

EXPAREL is also approved for infiltration in pediatric patients aged six years and older in the U.S.

In Europe, EXPAREL is approved 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.

Anesthesia-driven postsurgical management with long-acting field and nerve blocks utilizing EXPAREL are enabling the migration of complex, painful surgeries to outpatient sites of care.

ZILRETTA is the first and only extended-release, intra-articular therapy that can provide major relief for OA knee pain for three months and has the potential to become an alternative to hyaluronic acid, or HA, and platelet rich plasma, or PRP, injections or other early intervention treatments.

With the iovera° system, healthcare providers can replace narcotics and radiofrequency ablation with an innovative drug-free nerve block.

We believe the iovera° system is also highly complementary to ZILRETTA.

In addition to our current commercial opportunities, we are advancing label expansion activities.

For EXPAREL, we are advancing two Phase 3 studies in lower extremity nerve block procedures, as well as a development program for pediatric patients under six years of age.

For ZILRETTA, we plan to initiate a Phase 3 study in shoulder OA and we are defining label expansion studies to include safety superiority in patients with Type 2 diabetes and repeat dosing for OA knee pain.

For iovera°, we are developing new iovera° Smart Tips for chronic lower back pain and spine procedures.

We are also advancing plans to develop iovera° as a treatment for spasticity.

• Advancing our clinical-stage pipeline within multiple areas of unmet need.

We are advancing our pipeline of clinical-stage assets that utilize our proprietary multivesicular liposome (pMVL) technology.

The pMVL carrier matrix consists of microscopic, spherical, lipid-based particles composed of a honeycomb of numerous, non-concentric, internal aqueous chambers containing the encapsulated active agent.

Each chamber is separated from adjacent chambers by lipid membranes.

Following injection, the pMVL particles release the active agent over an extended period as the lipid membranes erode or reorganize.

We are preparing to launch a Phase 2 study of Dexamethosone-pMVL for low back pain (“PCRX-401”), a Phase 2 study of high-dose bupivacaine-pMVL for five or more days of pain relief (“PCRX-501”), and a Phase 2 study of low-dose bupivacaine-pMVL for epidural analgesia.

• Accessing complementary innovative assets using a combination of strategic investment, in-licensing, or acquisition.

We believe EXPAREL, ZILRETTA, iovera° and our pMVL drug delivery technology offer a strong foundation to address the opioid epidemic.

Building on these proprietary assets, we have also made investments in the musculoskeletal and chronic pain spaces.

We plan to continue to advance these two key areas with a focus on the knee and spine continuums of care and chronic pain.

We are using a combination of strategic investments to support promising early stage platforms, as well as in-licensing or acquisition transactions to build-out a pipeline of innovation to improve patients’ journeys along the neural pain pathway.

The Opioid Epidemic

Opioid addiction in the U.S.

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.

has reached epidemic proportions, with the U.S.

Centers for Disease Control and Prevention, or CDC, reporting that overdose deaths rose by 29 percent to an unprecedented amount of more than 100,000 in the U.S.

in the 12-months ending April 2021.

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

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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.

Synthetic opioids are the primary driver of the increases in overdose deaths, with deaths from synthetic opioids and psychostimulants also increasing in the 12-months ending April 2021.

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.

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.

Among patients having knee replacement surgery or a colectomy, newly persistent opioid users climbed as high as 15% and 17%, respectively.

Further, women were 40% more likely to become persistent opioid users than men;

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

A 2017 report shows that across the

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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 nine percent of surgical patients became newly persistent users in 2017, continuing to take these opioids at least three to six months after their procedure.

Among patients having knee replacement surgery or a colectomy, newly persistent opioid users climbed as high as 15 percent and 17 percent, respectively.

Further, women were 40 percent more likely to become persistent opioid users than men;

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

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 as follows:

• Expanding the use of EXPAREL in key surgical settings:

We are expanding the clinical evidence for EXPAREL through Phase 4 clinical trials across several surgical specialties.

We have published positive results from a Phase 4 multicenter, randomized, controlled trial, or RCT, in TKA in the Journal of Arthroplasty .

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 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:

New payer policies and benefits are supporting this migration to realize cost savings while enhancing patient care through the use of opioid-sparing protocols.

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, 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.

• Partnering with those who share our commitment to innovative opioid-sparing procedural solutions:

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 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, Shatterproof and IPG.

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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:

* Pediatric FDA action date of March 22, 2021 was 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.

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Our Commercial Products

EXPAREL (bupivacaine liposome injectable suspension)

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

In the U.S., EXPAREL is currently indicated in patients six years of age and older for single-dose infiltration to produce postsurgical local analgesia, and in adults as an interscalene brachial plexus nerve block to produce postsurgical regional analgesia.

Safety and efficacy have not been established in other nerve blocks.

In November 2020, the European Commission, or EC, granted marketing authorization for 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.

We launched EXPAREL in the United Kingdom, or U.K., and select European Union, or E.U., countries in November 2021.

Since its initial approval in 2011, more than 10 million patients have been treated with EXPAREL.

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

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.

Our net product sales of EXPAREL in 2021 were $506.5 million.

For the years ended December 31, 2021, 2020 and 2019, net product sales of EXPAREL accounted for 94%, 96% and 98% of our total revenues, respectively.

ZILRETTA (triamcinolone acetonide extended-release injectable suspension)

ZILRETTA was approved by the FDA in October 2017 and launched in the U.S.

shortly thereafter.

We market ZILRETTA through our ZILRETTA and iovera° sales force of approximately 50 Treatment Solutions Mangers who are providing clinicians with two unique OA treatment options to individualize patient care.

ZILRETTA is the first and only extended-release, intra-articular therapy for patients confronting OA knee pain.

ZILRETTA employs a proprietary microsphere technology combining triamcinolone acetonide, or TA, a commonly administered, immediate-release corticosteroid, with a poly lactic-co-glycolic acid, or PLGA, matrix to provide extended pain relief.

PLGA is a proven extended-release delivery vehicle that is metabolized to carbon dioxide and water as it releases drug in the IA space and is used in other approved drug products and surgical devices.

The ZILRETTA microspheres slowly and continuously release triamcinolone acetonide into the knee to provide significant pain relief for 12 weeks, with some people experiencing pain relief through 16 weeks.

We added ZILRETTA to our commercial offering with the completion of the Flexion Acquisition in November 2021.

ZILRETTA net product sales were $102.7 million for the year ended December 31, 2021.

The vast majority of the 2021 ZILRETTA sales occurred prior to the completion of the Flexion Acquisition and prior to our ownership of Flexion.

We recognized ZILRETTA net product sales of $12.7 million during the post-closing period of November 19, 2021 to December 31, 2021.

The iovera° system

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.

It has been FDA 510(k) cleared for use in pain applications since March 2014.

We believe the iovera° system is highly complementary to EXPAREL and ZILRETTA 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, 2021, our net product sales of iovera° were $16.2 million.

EXPAREL Clinical Benefits

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• expands easily with saline or lactated Ringer’s solution to reach a desired volume;

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

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

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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.

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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-based enhanced recovery after surgery, or 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 used across multiple orthopedic procedures, including joint reconstruction, shoulder, spine, extremity procedures, and hip fractures.

Total joint arthroplasties are expected to grow rapidly in the coming years with a significant migration of these procedures from the inpatient hospital setting to outpatient sites of care.

EXPAREL-based regional analgesia as part of multimodal pain management protocols in enhanced ERAS pathways is supporting this surgical migration.

The clinical and economic benefits of EXPAREL in total joint arthroplasty procedures have been demonstrated in clinical studies with EXPAREL use associated with significant reductions in opioid consumption, well-controlled pain management, shorter recovery time, same-day discharge to home and high patient satisfaction.

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 reduced reliance on opioids, which have been the mainstay in postsurgical pain control in the spine area for decades.

Two important patient groups are driving the spine market:

first, pediatric cases, like adolescent scoliosis patients, who are undergoing highly invasive surgeries and who until very recently only had opioids available to treat their pain, and second, adult degenerative patients who are often coming into surgery opioid-tolerant and who may have already had multiple back surgeries.

Managing postsurgical pain in these adult degenerative patients

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can be challenging due to their established opioid tolerance, but with EXPAREL, healthcare providers can control their pain with a non-opioid approach, and when feasible based on surgical intervention and patient characteristics, move many historical inpatient procedures to the 23-hour stay environment.

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.

Like other regional field blocks, our anesthesiologist customers see the strong advantages of using brachial plexus blocks as a vehicle for shifting procedures to the outpatient 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, 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.

A variety of truncal blocks have emerged for use in abdominal and colorectal procedures.

Transversus abdominis plane, or TAP, and erector spine plane blocks represent a significant market where EXPAREL is providing long-acting pain control in the abdominal region and supporting the migration of these procedures to the 23-hour setting.

We expect the expanding use of EXPAREL field blocks as the foundation of enhanced recovery protocols across various abdominal and colorectal procedures to continue to be a significant growth driver.

Women’s Health

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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.

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

Cardiothoracic

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

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EXPAREL Dosing, Volume Expansion and Admixing with Bupivacaine HCl

EXPAREL is available as a 266 mg/20 mL single-use vial and a 133 mg/10 mL single-use vial.

The recommended dose of EXPAREL is based on (i) the size of the surgical site;

(ii) the volume needed to cover the width and depth of the surgical site and (iii) patient-specific factors that could impact safety of an amide-type local anesthetic.

The maximum dose should not exceed 266 mg.

EXPAREL can be expanded in volume to optimize results.

Physicians consider the size of the surgical site and neuroanatomy to determine dosing and volume expansion.

The 266 mg (20 mL) EXPAREL vial can be expanded with up to 280 mL of normal (0.9%) saline or lactated Ringer’s solution for a total volume of 300 mL (a 1:14 ratio).

For smaller surgical sites where 20 mL is too much volume, the 133 mg (10 mL) vial should be considered.

To ensure early analgesic activity, EXPAREL can be admixed with bupivacaine HCl so long as the ratio does not exceed 1:2.

For example, the 266 mg/20mL vial may be administered with up to 30 mL of 0.5% bupivacaine HCl or up to 60 mL of 0.25% bupivacaine HCl.

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

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.

In March 2021, the FDA approved our sNDA to expand the EXPAREL label to include use in patients six years of age and older for single-dose infiltration to produce postsurgical local analgesia.

EXPAREL is the first and only FDA-approved long-acting local analgesic for the pediatric population as young as age six.

Opioids, short-acting local anesthetics and catheter-based devices have been the historical mainstay in pediatric postsurgical pain management despite safety implications and limited studies in children.

The risks and complications of adult-based pain management approaches may be magnified in children with 50 percent of children reporting moderate to severe pain in the hospital after surgery and 20 percent of children reporting chronic pain 12 months after surgery.

EXPAREL is redefining the paradigm of care for postsurgical pain management in children as the market’s only clinically proven safe alternative for long-acting, non-opioid postsurgical pain control in children aged 6 and over.

There are approximately one million pediatric procedures per year in the U.S.

We are working with prominent thought leaders who are providing a rapid transfer of best-practice for establishing EXPAREL-based protocols as the new standard of care.

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.

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.

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.

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:

patients aged 12 to less than 17 years and patients aged 6 to less than 12 years.

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 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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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 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.

Global Expansion

We have defined a global expansion strategy for EXPAREL that we believe provides us with the opportunity to increase our revenue and leverage our fixed cost infrastructure.

We have prioritized Europe, Canada and China.

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 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.

Third molar (wisdom tooth) extractions are among the most common dental procedures in the U.S.

and are performed in up to 5 million patients every year.

Oral surgery, including third molar extraction, is associated with a defined period of pain and discomfort that traditionally leads to prescriptions for opioids.

A large retrospective review of the Medicaid database found that of 2.8 million patients who underwent surgical tooth extraction, 1.2 million, or roughly 42 percent, filled a prescription for opioids within seven days after surgery, with a median of 120 morphine milligram equivalents dispensed per patient.

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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 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 or medical reasons.

Osteoarthritis of the Knee

There is a growing body of clinical data demonstrating success with the iovera° treatment for osteoarthritis of the knee.

There are 14 million individuals in the U.S.

who have symptomatic knee osteoarthritis, and nearly two million are under the age of 45.

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 up to 150 days after being treated with iovera°.

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the effect of EXPAREL on postoperative opioid prescribing after third molar extraction showed that patients who received EXPAREL were prescribed significantly fewer opioids, including refills, compared to those who did not receive EXPAREL.

The study, A Retrospective Cross-Sectional Study of the Effect of Liposomal Bupivacaine on Postoperative Opioid Prescribing After Third Molar Extraction , was published in The Journal of Oral and Maxillofacial Surgery in July 2021.

In this retrospective analysis, researchers reviewed data from 600 patients who underwent third molar extractions between 2012 and 2018.

De-identified data from 300 patients who received EXPAREL were compared to data from 300 patients who did not receive an infiltration of EXPAREL.

Data from two outpatient oral surgery centers were included in this analysis.

Patients in the EXPAREL treatment group received:

• 59 percent fewer opioids, including refills, compared to patients in the non-EXPAREL group (p<0.0001)

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

7.7% of patients, respectively)

In September 2017, we announced a collaboration with Aetna, one of the nation’s leading diversified health care benefits companies, with the support of the American Association of Oral and Maxillofacial Surgeons (AAOMS).

This national program aims to reduce the number of opioid tablets dispensed to patients undergoing impacted third molar 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.

ZILRETTA Clinical Benefits

ZILRETTA combines a commonly administered steroid, TA, with PLGA, delivering a 32 milligram dose of TA to provide extended therapeutic concentrations in the joint and persistent analgesic effect.

Based on the strength of its pivotal and other clinical trials, we believe that ZILRETTA represents an important treatment option for the millions of patients in the U.S.

in need of safe and effective extended relief from OA knee pain.

The pivotal Phase 3 trial, on which the approval of ZILRETTA was based, showed that ZILRETTA significantly reduced OA knee pain for 12 weeks, with some people experiencing pain relief through Week 16.

Both the magnitude and duration of pain relief provided by ZILRETTA in clinical trials were clinically meaningful with the magnitude of pain relief amongst the largest seen to date in OA clinical trials.

The overall frequency of treatment-related adverse events in these trials was similar to those observed with placebo, and no drug-related serious adverse events were reported.

We believe that ZILRETTA holds the potential to become the corticosteroid of choice given its safety and efficacy profile, and the fact that it is the first and only extended-release corticosteroid on the market.

In September 2021, the American Association of Orthopaedic Surgeons, or AAOS, updated its evidence-based clinical practice guidelines, finding ZILRETTA can improve patient outcomes over traditional immediate-release corticosteroids.

iovera° Clinical Benefits

There is a growing body of clinical data demonstrating success with iovera° treatment for OA of the knee.

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

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

Preliminary findings demonstrated reductions in opioids, including:

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• iovera° is repeatable;

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• The iovera° technology does not risk damage to the surrounding tissue;

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• iovera° can be delivered precisely using ultrasound guidance or an anatomical landmark.

We believe the combination of iovera° and EXPAREL will become the preferred procedural solution that will empower patients and their healthcare providers to take control of the patients’ osteoarthritis journey, while minimizing the need for opioids.

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

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

(i) a DepoFoam-based

In September 2021, the AAOS updated its evidence-based clinical practice guidelines, reporting that denervation therapy—including cryoneurolysis—may reduce knee pain and improve function in patients with symptomatic OA of the knee.

The Osteoarthritis Market

OA is the most common form of arthritis.

It is also called degenerative joint disease and occurs most frequently in the hands, hips and knees.

With OA, the cartilage within a joint begins to break down and the underlying bone begins to change.

These changes usually develop slowly and get worse over time.

OA can cause pain, stiffness and swelling.

In some cases it also causes reduced function and disability;

some people are no longer able to do daily tasks or work.

According to the CDC, OA affects over 32.5 million adults in the U.S.

The lifetime risk of developing symptomatic knee OA is 45 percent.

The prevalence of symptomatic knee OA increases with each decade of life, with the annual incidence of knee OA being highest between age 55 and 64 years old.

There are 14 million individuals in the U.S.

who have symptomatic knee OA, and nearly two million are under the age of 45.

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

With the addition of ZILRETTA to our product offering, we can now offer clinicians the flexibility to individualize OA knee pain treatment with either ZILRETTA or a drug-free nerve block with iovera° based on patient factors and preference, physician training, site of care and reimbursement considerations.

Label and Global Expansion Activities

• Pediatrics.

We are working with the FDA to finalize a regulatory pathway to expand the EXPAREL label for patients under six years of age, as well as the administration of EXPAREL as a nerve block in the pediatric setting.

We are working with both the FDA and the European Medicines Agency, or EMA, to harmonize our pediatric clinical studies as much as possible between the two regions.

• Lower extremity nerve block.

We are advancing two Phase 3 studies of EXPAREL as a nerve block in lower extremity surgeries.

One is a popliteal sciatic nerve block for bunionectomy and the second is an adductor canal block for TKA.

We believe positive results from these studies will form the basis for an sNDA submission seeking label expansion to include lower extremity nerve blocks.

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.

• Stellate ganglion block.

We believe a long-acting stellate ganglion block with EXPAREL has the potential to be an effective approach for managing ventricular tachycardia (commonly referred to as “electrical storm”), a life-threatening clinical condition characterized by the recurrence of hemodynamically unstable ventricular tachycardia and/or ventricular fibrillation.

We are planning pilot studies that will separately evaluate long-acting stellate ganglion blocks with EXPAREL and iovera° for managing electrical storm.

• Global expansion.

We have prioritized the European and Latin American markets for global expansion.

We launched EXPAREL in the U.K.

and targeted E.U.

countries in the fourth quarter of 2021.

In Latin America, we have a distribution agreement with Eurofarma Laboratories S.A., or Eurofarma, for the development and commercialization of EXPAREL.

Eurofarma has the exclusive right to market and distribute EXPAREL in 19 countries in Latin America, including Argentina, Brazil, Colombia and Mexico.

In addition, Eurofarma will be responsible for regulatory filings for EXPAREL in these countries.

We will receive royalties and are also eligible to receive regulatory- and commercial-based milestone payments that are triggered by the achievement of certain events.

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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 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.

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We believe ZILRETTA’s extended-release profile may also provide effective treatment for OA pain of the shoulder, and we intend to initiate a Phase 3 trial investigating ZILRETTA in shoulder OA in 2022.

In addition, we are planning a comparative safety study of ZILRETTA in patients with Type 2 diabetes and are evaluating a repeat dosing study.

The iovera° System

We recently launched a next-generation iovera° handheld device, which we believe is more efficient, easier to use and more durable.

We are also developing new iovera° Smart Tips for certain procedures and are developing a specific tip for a medial branch block for treating chronic low-back pain, as well as spine procedures.

We are also seeking a label expansion for the treatment of spasticity, which we believe is a significant long-term opportunity for iovera°.

Additionally, we expect to begin selling iovera° in the E.U.

through a contracted sales force in the first quarter of 2022.

Clinical Development Programs

PCRX-201 and PCRX-301 (Formerly FX-201 and FX-301)

PCRX-201 and PCRX-301 were added to our portfolio as part of the Flexion Acquisition.

PCRX-201 is a gene therapy product candidate designed to provide “on demand” production of an anti-inflammatory protein, interleukin-1 receptor antagonist (IL-1Ra) whenever inflammation is detected in the joint.

PCRX-301, is a locally administered Na V 1.7 inhibitor, known as funapide, formulated for extended release in a thermosensitive hydrogel.

The initial development of PCRX-301 was intended to support administration as a peripheral analgesic lower extremity nerve block for management of post-operative pain.

pMVL-Based Clinical Programs

Given the proven safety, flexibility and customizability of our pMVL drug delivery technology platform for acute, sub-acute and chronic pain applications, we have several pMVL-based products in clinical development.

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

(i) PCRX-401, a dexamethasone-pMVL for low back pain;

(ii) PCRX-501, a high-dose bupivacaine-pMVL for extended pain relief and (iii) a low-dose bupivacaine-pMVL for intrathecal analgesia.

We are planning to initiate a Phase 2 study for low-dose bupivacaine-pMVL for intrathecal analgesia in late 2022.

External Innovation

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

We are using a combination of strategic investments, in-licensing and acquisition transactions to buildout a pipeline of innovation to improve patients’ journeys along the neural pain pathway.

Select strategic investments we have made to support promising early stage platforms are summarized below.

Company Development Stage Description of Platform Technology Potential Therapeutic Areas

Coda Therapeutics, Inc.

Preclinical Chemogenetic platform to reverse the aberrant neuronal activity underlying neurological disorders using optimized adeno-associated virus (AAV) vectors

Neuropathic pain

Genascence Corporation Phase 1 Adeno-Associated Vector (AAV)-based gene therapy targeting Interleukin 1 Receptor Antagonist (IL-1Ra)

GeneQuine Biotherapeutics GmbH Preclinical Next-generation gene transfer vehicles that enter joint cells to confer multi-year gene expression

OA and other musculoskeletal disorders

Spine BioPharma, LLC Phase 3-ready Remedisc 7-amino acid chain peptide that binds to and induces down regulation of transforming growth factor, beta 1 (TGFβ1)

Degenerative disc disease

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Sales and Marketing

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 primary target audiences are healthcare practitioners who influence pain management decisions including anesthesiologists, surgeons, pharmacists and physician extenders (including physician assistants, nurse practitioners 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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• working in tandem with hospital staff, such as anesthesiologists, surgeons, heads of quality, pharmacists, executives and registered nurses, to provide access and resources for drug utilization or medication use evaluations and health outcomes studies, which provide retrospective and prospective analyses for our hospital customers using their own hospital data to demonstrate the true cost of opioid-based postsurgical pain control;

• working with KOLs and advisory boards to address topics of best practice techniques as well as guidelines and protocols for the use of our products, meeting the educational and training needs of our physician, surgeon, anesthesiologist, pharmacist and registered nurse customers

• working with Key Opinion Leaders (KOLs) and advisory boards to address topics of best practice techniques as well as guidelines and protocols for the use of our products, meeting the educational and training needs of our physician, surgeon, anesthesiologist, pharmacist and registered nurse customers

• undertaking education initiatives such as center of excellence programs;

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web-based training and virtual launch programs;

• collaborating with healthcare providers towards improving the knowledge and management of pain in surgical and osteoarthritis patients with a focus on opioid risk and non-opioid alternatives and engaging our field-based medical teams in system-wide partnerships to address the national opioid epidemic, with a goal of studying alternative postsurgical pain management options that focus on optimization and opioid alternative strategies;

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

• collaborating with healthcare providers towards improving the knowledge and management of pain in surgical and OA patients with a focus on opioid risk and non-opioid alternatives and engaging our field-based medical teams in system-wide partnerships to address the national opioid epidemic, with a goal of studying alternative postsurgical pain management options that focus on optimization and opioid alternative strategies;

• facilitating reimbursement and the shift of procedures to hospital outpatient and ambulatory surgical center, or 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”).

In October 2020, we opened 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;

The PITT supports a full range of educational events to advance clinician understanding of the latest local, regional, and field block approaches for managing pain and reducing or eliminating exposure to opioids.

Our corporate headquarters are also located at the PITT.

The PITT consists of approximately 13,000 square-feet of fully adaptable space and is equipped with state-of-the-art technology and audio/visual capabilities and 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.

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

We have started the process for opening a second innovation and training center that will be located in Houston, Texas.

DePuy Synthes Sales Inc.

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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.

During that time

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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.

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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.

TELA Bio, Inc.

In October 2017, we made an investment of $15.0 million in TELA Bio, Inc., or TELA Bio, a surgical reconstruction company that markets its proprietary OviTex TM portfolio of products for ventral hernia repair and abdominal wall reconstruction.

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

SkyePharma Holdings, Inc.

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In connection with the stock purchase agreement related to the Skyepharma Acquisition, we agreed to certain earn-out and milestone payments.

Milestone payments are based on net sales of DepoBupivacaine products collected, including EXPAREL, and certain other yet-to-be-developed products.

For purposes of meeting future potential milestone payments, annual net sales are measured on a rolling quarterly basis.

The milestones are as follows:

Milestones were based on net sales of DepoBupivacaine products collected, including EXPAREL, and certain other yet-to-be-developed products.

The milestones were as follows:

• $10.0 million upon the first commercial sale in the U.S.

(met April 2012);

• $4.0 million upon the first commercial sale in the United Kingdom, France, Germany, Italy or Spain;

• $4.0 million upon the first commercial sale in the U.K., France, Germany, Italy or Spain (met November 2021);

• $8.0 million when annual net sales collected reach $100.0 million (met September 2014);

• $8.0 million when annual net sales collected reach $250.0 million (met June 2016);

• $32.0 million when annual net sales collected reach $500.0 million.

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 unmet milestone payments totaling $36.0 million.

• $32.0 million when annual net sales collected reach $500.0 million (met December 2021).

In the fourth quarter of 2021, we met both remaining milestones:

$4.0 million upon the first commercial sale in the U.K., France, Germany, Italy or Spain which was paid in the fourth quarter of 2021;

and $32.0 million when annual net sales collected reached $500.0 million, which was paid in the first quarter of 2022.

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

Research Development Foundation

Pursuant to an agreement with the Research Development Foundation, or RDF, we are required to pay RDF a low single-digit royalty on the collection of revenues from our DepoFoam-based products for as long as certain patents assigned to us under the agreement remain valid.

Pursuant to an agreement with the Research Development Foundation, or RDF, we were required to pay RDF a low single-digit royalty on the collection of revenues from certain products for as long as certain patents assigned to us under the agreement remain valid.

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.

11,033,495 issued on June 15, 2021.

Thereafter, RDF asserted that the issuance of that patent extends our royalty obligations under the agreement until 2041.

We disagreed and explained that the royalty period under the agreement was set to end on December 24, 2021 with the expiration of our U.S.

Because of the disagreement over the interpretation of the agreement, in December 2021, we filed a declaratory judgment lawsuit in the U.S.

District Court for the District of Nevada (21-cv-02241).

The lawsuit seeks a declaration from the court that we owe no royalties to RDF with respect to our EXPAREL product after December 24, 2021.

During the pendency of the lawsuit, we will continue to pay royalties to RDF under protest.

We are unable to predict the outcome of this action at this time.

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Aratana Therapeutics, Inc.

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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.

Eurofarma Laboratories S.A.

In June 2021, we entered into a distribution agreement with Eurofarma for the development and commercialization of EXPAREL in Latin America.

Under the terms of the agreement, Eurofarma obtained the exclusive right to market and distribute EXPAREL in 19 countries in Latin America, including Argentina, Brazil, Colombia, and Mexico.

In addition, Eurofarma is responsible for regulatory filings for EXPAREL in these countries.

We will receive royalties based on Eurofarma’s future commercialization of the product and are also eligible to receive milestone payments that are triggered by the achievement of certain regulatory and commercial events.

Verve Medical Products, Inc.

In July 2021, we entered into a licensing agreement with Verve Medical Products, Inc.

for the distribution of iovera° in Canada.

We began selling iovera° in Canada in the fourth quarter of 2021.

Hong Kong Pharma Tainuo Ltd.

In March 2020, Flexion entered into an exclusive license agreement with Hong Kong Pharma Tainuo Ltd., or HK Tainuo, and Jiangsu Tainuo Pharmaceutical Co.

Ltd., or Jiangsu Tainuo, a subsidiary of China Shijiazhuang Pharmaceutical Co, Ltd., for the development and commercialization (other than manufacturing) of ZILRETTA in Greater China (consisting of mainland China, Hong Kong, Macau and Taiwan).

Under the terms of the agreement, HK Tainuo made upfront payments to Flexion in 2020.

We are eligible to receive up to $32.5 million in aggregate development, regulatory and commercial sales milestone payments.

All payments received from HK Tainuo are subject to applicable Hong Kong withholding taxes.

HK Tainuo is responsible for the clinical development, product registration and commercialization of ZILRETTA in Greater China and Jiangsu Tainuo serves as the guarantor of HK Tainuo’s obligations and responsibilities under the agreement.

We are solely responsible for the manufacture and supply of ZILRETTA to HK Tainuo for all clinical and commercial activities.

The terms related to product manufacturing and supply, including pricing and minimum purchase requirements agreed to in the license

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Nuance Biotech Co.

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.

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agreement, will be covered by a separate supply agreement.

All amounts owed to us are nonrefundable and non-creditable once paid.

Significant Customers

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

We had three wholesalers each comprising 10 percent or more of our total revenue for the year ended December 31, 2021:

Cardinal Health, Inc., McKesson Drug Company and AmerisourceBergen Health Corporation, which accounted for 31%, 28% and 26% of our total revenues, respectively.

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EXPAREL is delivered directly to end-users without the wholesalers ever taking physical possession of the product.

None of our customers of ZILRETTA or iovera° accounted for 10 percent or more of our total revenue for the year ended December 31, 2021.

Manufacturing and Research Facilities

Internal Facilities

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

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 manufacture EXPAREL and iovera° handpieces at our facility in San Diego, California.

We also have a mixed-use research and development, manufacturing and office facility which sits adjacent to our EXPAREL and iovera° 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 manufacturing facilities are inspected regularly and approved by the FDA, EMA, Medicines and Healthcare Products Regulatory Agency, or 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 purchase raw materials and components from third-party suppliers to manufacture EXPAREL and iovera°.

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

In most instances, alternative sources of supply are available, although switching to an alternative source would, in some instances, take time and could lead to delays in manufacturing our product candidates.

While we have not experienced shortages of our raw materials in the past, such suppliers may not sell these raw materials to us at the times that we need them or on commercially reasonable terms and we do not have direct control over the availability of these raw materials from our suppliers.

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

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

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.

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

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, 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.

We are expanding our EXPAREL manufacturing capacity at our Science Center Campus as we expect the demand for EXPAREL will increase.

Our 90,000 square-foot mixed-use research and development, manufacturing and office facility is located adjacent to our EXPAREL manufacturing facility and was completely renovated in 2020 to meet our specifications.

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.

We also have an approximately 21,000 square foot warehouse 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.

Our Fremont, California facility 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.

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

We have validated processes for continuous monitoring of temperature from manufacturing through delivery to the end-user.

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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.

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 “EXPAREL Manufacturing and Supply Agreement”) to collaborate in the manufacture of EXPAREL.

Thermo Fisher undertook certain technical transfer activities and construction services needed to prepare Thermo Fisher’s Swindon, England facility for the manufacture of EXPAREL in two dedicated manufacturing suites.

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We also reimburse Thermo Fisher for certain nominal expenses and additional services.

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 first manufacturing suite, which was received in May 2018.

In February 2019, we announced that commercial production of EXPAREL was underway at the first Thermo Fisher suite.

We developed a second dedicated suite that is expected to enable another doubling of EXPAREL manufacturing capacity.

We began commercial production of EXPAREL out of that second suite in August 2021.

The initial term of the EXPAREL 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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We may terminate this agreement upon one month’s notice if a regulatory authority causes the withdrawal of EXPAREL from the U.S.

or any other market that represents 80% of our overall sales, or at any time for convenience by providing between 18 and 36 months’ notice (depending on the number of years after the FDA approval date).

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

or any other market that represents 80 percent of our overall sales, or at any time for convenience by providing between 18 and 36 months’ notice (depending on the number of years after the FDA approval date).

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

Prior to the Flexion Acquisition, in July 2015, Flexion and Thermo Fisher entered into a Manufacturing and Supply Agreement (the “ZILRETTA Manufacturing and Supply Agreement”) and a Technical Transfer and Service Agreement related to the manufacture of ZILRETTA at the same Thermo Fisher site in Swindon, England where our EXPAREL suites are located.

Thermo Fisher agreed to undertake certain transfer activities and construction services needed to prepare its facility for the commercial manufacture of ZILRETTA in dedicated manufacturing suites.

Flexion provided Thermo Fisher with certain equipment and materials necessary to manufacture ZILRETTA.

We make monthly payments to Thermo Fisher for such activities and reimburse Thermo Fisher for certain material, equipment and miscellaneous expenses and additional services.

The initial term of the ZILRETTA Manufacturing Agreement that we assumed as part of the Flexion Acquisition expires in October 2027.

We pay a monthly base fee to Thermo Fisher for the operation of the manufacturing suites and a per product fee for each vial of ZILRETTA based upon a forecast of commercial demand.

We also reimburse Thermo Fisher for purchases of materials and equipment made on our behalf, certain nominal expenses and additional services.

The ZILRETTA Manufacturing Agreement will remain in full effect unless and until it expires or is terminated.

Upon termination of the ZILRETTA Manufacturing Agreement (other than termination by us in the event that Thermo Fisher does not meet the construction and manufacturing milestones or for a breach by Thermo Fisher), we will be obligated to pay for the costs incurred by Thermo Fisher associated with the removal of our manufacturing equipment and for Thermo Fisher’s termination costs up to a specified capped amount.

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.

In January 2020, we and Providien entered into a Manufacturing and Supply Agreement (the “Providien Agreement”) to collaborate in the manufacture of iovera° Smart 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.

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

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

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We seek to protect our products, our product candidates and our technologies through a combination of patents, trade secrets, proprietary know-how, regulatory exclusivity and contractual restrictions on disclosure.

We note that the patents and applications described below are only examples intended to highlight the variety of coverage provided by our existing and constantly developing portfolio.

We note that the patents and

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applications described below are only examples intended to highlight the variety of coverage provided by our existing and constantly developing portfolio.

Patents and Patent Applications

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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, 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°.

As of December 31, 2021, there are over 13 families of patents and patent applications relating to various aspects of the pMVL drug delivery technology and 25 families of patents and patent applications relating to various aspects of the technology used by iovera°.

There is one family of patents and patent applications relating to various aspects of the technology used by ZILRETTA.

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

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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

Our issued patents expire at various dates in the future, as discussed below, with the last currently issued patent for the pMVL drug delivery technology expiring in 2041, the last currently issued patent for ZILRETTA expiring in 2031 and the last currently issued patent for the iovera° technology expiring in 2040.

Patents and Patent Applications for our pMVL and pMVL Products

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.

Several Track One patent applications directed to various aspects of an improved EXPAREL manufacturing process were filed in January 2021 and, if granted, would provide patent protection through 2041.

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

In June 2021, the United States Patent and Trademark Office, or USPTO, issued U.S.

11,033,495 related to EXPAREL.

The patent, “ Manufacturing of Bupivacaine Multivesicular Liposomes ,” claims composition of EXPAREL prepared by the improved manufacturing process.

In November 2021, the USPTO issued U.S.

11,185,506 and 11,179,336, claiming the improved EXPAREL manufacturing process and EXPAREL composition, respectively.

All three patents will have an expiration date of January 22, 2041.

11,033,495 and 11,179,336 are currently listed in the FDA’s “ Approved Drug Products with Therapeutic Equivalence Evaluations ” (the “Orange Book”).

Additionally, we recently received four Notices of Allowance from the USPTO for four EXPAREL patents that have been examined and will issue.

Two patents claim chemical composition of EXPAREL and two claim product-by-process.

After issuance, we will submit these patents for listing in the Orange Book.

After listing, the Orange Book would have a total of six EXPAREL patents each with an expiration date of January 22, 2041.

Issued patents for EXPAREL in the U.S.

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In addition, a patent relating to the process for making the product candidate expired in November 2018.

In April 2010, a provisional patent was filed relating to a new process to manufacture EXPAREL and other DepoFoam-based products.

The process offers many advantages to the current process, including larger scale production and lower manufacturing costs.

In April 2010, a provisional patent was filed relating to an alternative process to manufacture EXPAREL and other pMVL-based products.

The process offers many advantages, including larger scale production and lower manufacturing costs.

In April 2011, we filed an international patent application providing the basis for several national phase patent applications, for example in Europe, China, Japan, Israel and India which, if granted, could potentially prevent others from using this process until at least 2031.

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

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

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

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

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.

As of December 31, 2021, 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 alternative process, including the methods of using the apparatus and the apparatus itself.

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Patents and Patent Applications for ZILRETTA

A composition of matter patent has been issued by the USPTO for ZILRETTA, with a patent term into 2031.

The USPTO has also issued two patents directed at the methods of manufacturing and using ZILRETTA with patent terms into 2031.

Considerable expertise and effort were required to carry out the large body of original work underlying the formulation of ZILRETTA, including experimenting with, and observing the effects of over 50 steroid and PLGA formulations.

We believe our extensive know-how and trade secrets relating to the manufacturing process for ZILRETTA, including those that relate to precise pharmaceutical release profiles, represent a meaningful entry barrier.

We own three U.S.

ZILRETTA patents as well as counterpart foreign patents and patent applications covering composition of matter, methods of manufacture, and methods of use.

ZILRETTA patents have expiration dates in 2031.

The ZILRETTA composition of matter invention is the result of several unique discoveries relating to a narrow drug load specification, a certain release profile of polymers, specific polymer weights and ratios, and clinical efficacy observed within a dose-range.

patents directed to ZILRETTA’s composition of matter and methods of use are listed in the FDA Orange Book.

We also have two U.S.

patents directed at compositions of matter similar to ZILRETTA, as well as methods of making and using the same, with patent terms into 2031.

In 2021, we had one patent granted in Hong Kong, further expanding our global intellectual property portfolio, which includes patents in the U.S., Australia, Canada, China, E.U., Indonesia, India, Japan, Malaysia, Mexico, New Zealand, the Philippines, the Russian Federation, Saudi Arabia, Singapore, South Africa, South Korea, Taiwan and Ukraine.

These foreign patents cover the composition of matter, methods of manufacturing, and methods of using ZILRETTA and are similar in scope to the protection in the U.S.

described above.

We have also in-licensed intellectual property, owned by the Southwest Research Institute, or SwRI, which gives us exclusive rights to SwRI patents covering our proprietary microsphere manufacturing technology used in the production of ZILRETTA.

These patents are scheduled to expire in 2025.

PCRX-201 (Formerly FX-201)

In December 2017, Flexion acquired the global rights to PCRX-201 from GeneQuine, including a direct exclusive license of certain foundational patents, patent applications, and other proprietary rights owned by the Baylor College of Medicine, or Baylor, that are related to PCRX-201 for human applications.

These patents generally cover the composition of matter and method of use of PCRX-201 in the treatment of OA.

In 2019, the USPTO issued patent number 10,301,647, which covers the composition of matter and method of use of PCRX-201 in the treatment of OA with a term through January 2033.

In addition, the Baylor patents related to PCRX-201 are issued in Europe, with an expiry date in 2032, and in Australia, Japan, China, India and Eurasia with expiry dates in 2033.

We are continuing to prosecute one U.S.

Baylor patent application related to PCRX-201.

Further, we have a pending Patent Cooperation Treaty, or PCT, application covering composition of matter and effective dosages of PCRX-201 in the treatment of OA in humans, which, if granted, is expected to provide protection until 2040.

We also have a U.S.

provisional application covering composition of matter and method of use of PCRX-201 for the treatment of degenerative disc disease (DDD), which, if granted, is expected to provide protection until 2042.

PCRX-301 (Formerly FX-301)

In September 2019, Flexion acquired the global rights to develop and commercialize funapide from Xenon Pharmaceuticals, Inc., or Xenon, which we have formulated for extended release with our proprietary thermosensitive hydrogel as PCRX-301.

As part of the transaction with Xenon, we acquired foundational patents and patent applications covering the composition of matter, methods of use, and methods of manufacture related to funapide.

We own patents directed to funapide granted in the U.S.

as well as Australia, Canada, China, Europe, Hong Kong, Mexico and New Zealand with expiry dates in 2030.

In addition, we have a PCT patent application covering composition of matter, method of use, and method of manufacture for PCRX-301, which, if granted, is expected to provide protection until 2040.

We also have a U.S.

provisional application covering a composition of matter, method of use, and method of manufacture for PCRX-301 with different amounts of polar organic solvent and solubility enhancer, which if converted and granted, is expected to provide protection until 2042.

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Patents and Patent Applications for iovera°

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Patents in this family are set to expire between 2025 and 2028.

Another important patent family has broad disclosure and coverage of a variety of indications for treatment by cryogenic devices, including joint function and stiffness, osteoarthritis, occipital neuralgia, spasticity, neuroma and other nerve entrapment indications and is set to expire between 2033 and 2037.

Another important patent family has broad disclosure and coverage of a variety of indications for treatment by cryogenic devices, including joint function and stiffness, OA, occipital neuralgia, spasticity, neuroma and other nerve entrapment indications and is set to expire between 2033 and 2037.

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 patents on the smart tip technology are set to expire between 2034 and 2037.

For example, patents covering 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 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.

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

In addition, we filed four new design patent families in 2021 in the U.S.

and foreign jurisdictions covering ornamental aspects of our next-generation cryogenic device.

Additional Intellectual Property

We have a provisional application covering composition of matter, method of use, and method of manufacture for formulations of an anesthetic drug of amino amide group (lidocaine, bupivacaine and ropivacaine) formulated in a triblock copolymer component (one or more PLGA-polyethylene glycol-PLGA triblock copolymers), which if converted and granted, is expected to provide protection until 2042.

Trade Secrets and Proprietary Information

Trade secrets play an important role in protecting our DepoFoam-based and iovera° products and provide protection beyond patents and regulatory exclusivity.

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

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challenges presented by aseptic manufacturing.

Trade secrets play an important role in protecting our pMVL-based products and pipeline, ZILRETTA and iovera° and provide protection beyond patents and regulatory exclusivity.

The scale-up and commercial manufacture of pMVL-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 our pMVL 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.

ZILRETTA is also manufactured using custom equipment and proprietary processes with respect to certain of the formulation and manufacturing techniques related to the TA-formulated PLGA microspheres in ZILRETTA, including those that relate to its precise pharmaceutical release profile.

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.

Additionally, our device includes proprietary software for device operations during cryotherapy treatments.

Additionally, the iovera° device includes proprietary software for device operations during cryotherapy treatments.

We seek to protect our proprietary information, including our trade secrets and proprietary know-how, by requiring our employees, consultants and other advisors to execute proprietary information and confidentiality agreements upon the commencement of their employment or engagement.

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Further, we require confidentiality agreements from third parties that receive our confidential data or materials.

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The pharmaceutical industry is intensely competitive and subject to rapid and significant technological change.

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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 pumps/catheter devices intended to provide bupivacaine over several days.

Avanos Medical, Inc.

markets these medical devices in the U.S.

Currently EXPAREL also competes with elastomeric pumps/catheter devices intended to provide bupivacaine over several days and with off-label combinations of other approved analgesics, called “cocktails”, that are physician-combined in an attempt to extend the duration of pain control.

Immediate-release steroids and HA injections are currently the two marketed classes of IA products that compete directly with ZILRETTA.

Also available are stem cell and PRP injections, but these require on-site preparation from tissue or blood taken from the patient and have generated questionable efficacy in controlled clinical trials.

Because these are minimally manipulated autologous therapies, they do not require and have not received FDA review or approval.

For that reason, they are generally not reimbursed by payers, and patients must pay out of pocket to receive these therapies.

Furthermore, the American Association of Hip & Knee Surgeons (AAHKS) issued a position statement indicating that it cannot recommend biologic therapies, including stem cell and PRP injections, for the treatment of advanced hip or knee arthritis.

The medical device industry is intensely competitive and subject to rapid and significant technological change.

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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,

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.

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

We expect any products that we develop and commercialize to compete on the basis of, among other things, efficacy, safety,

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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.

We expect any products that we develop and commercialize to compete on the basis of, among other things, efficacy, safety, convenience of administration and delivery, price and the availability of reimbursement from government and other third-party payers.

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.

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convenience of administration and delivery, price and the availability of reimbursement from government and other third-party payers.

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 OA 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.

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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 (including the EMA and MHRA), laws and regulations.

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

as well as authorities in Canada and Latin America), 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.

United States Regulatory Environment

Regulatory Environment

Pharmaceuticals

Generally, the FDA must approve any new drug, including a new use of a previously approved drug, before marketing of the drug occurs in the U.S.

In the U.S., generally the FDA must approve any new drug, including a new use of a previously approved drug, before marketing of the drug occurs in the U.S.

This process generally involves:

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

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

• 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.;

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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

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

Thus, submission of an 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

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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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In addition, sponsors may elect to conduct, or be required by the FDA to, conduct post-approval clinical trials to further assess the drug’s safety or effectiveness after NDA approval, generate new data and best-practice administration techniques.

Such post approval trials are typically referred to as Phase 4 clinical trials.

Studies in an indication after approval are typically referred to as Phase 4 clinical trials.

The requirements for drug approval and the clinical trials that approvals are based on are similar in other countries, however each regulatory agency will have differing policies, procedures and processes that we must comply with in each market we wish to sell our products in.

There also can be no assurance that approval or utilization of our products will be identical in different jurisdictions.

For example, EXPAREL is approved in femoral nerve block for treatment of post-operative pain in adults in Europe, but the FDA has not approved this indication in the U.S.

Medical Devices

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There are also certain requirements of state, local and foreign governments that must be complied with in the manufacture and marketing of our products.

A new indication for 510(k) clearance may or may not require a clinical trial—for instance, expanding the use of iovera° to treat spasticity will, and we expect to commence a clinical trial in 2022.

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Review and Approval Process

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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

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

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 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.

Upon receipt of an NDA, the FDA has 60 days to determine whether it is sufficiently complete to initiate a substantive review.

If the FDA identifies deficiencies that would preclude substantive review, the FDA will refuse to accept the NDA (“refuse to file”) and will inform the sponsor of the deficiencies that must be corrected prior to resubmission.

The resubmitted application is also subject to review before the FDA accepts it for filing.

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

Currently, the FDA does not require a REMS for EXPAREL but the EMA and MHRA do.

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

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

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The FDA aims to complete Standard Reviews of NDAs within 12 months of submission (ten months after the Day 60 filing date) and Priority Reviews within eight months of submission (six months after the Day 60 filing date).

For an sNDA, the FDA aims to complete its Standard Review within 10 months of submission and Priority Reviews within six months of submission.

Review processes may sometimes extend beyond these target completion dates due to FDA requests for additional information or clarification, difficulties scheduling an advisory committee meeting, negotiations regarding REMS or FDA workload issues, but in general under PDUFA the FDA is supposed to complete its reviews within the target timeframes despite these factors.

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Data from clinical trials are not always conclusive and the FDA may interpret data differently than we do.

The FDA could also require a REMS plan which could include medication guides, physician communication plans or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.

If the FDA requires a REMS plan, it could include medication guides, physician communication plans or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.

The FDA also may approve an NDA contingent on, among other things, changes to proposed labeling, a commitment to conduct one or more post-market studies or clinical trials and the correction of identified manufacturing deficiencies, including the development of adequate controls and specifications.

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An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications.

Outside the U.S., although timelines vary as do specific regulatory procedures, the same general principals hold including the potential for a REMS plan which could entail other requirements, including but not limited to patient registries and risk minimization tools.

Medical Devices

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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, 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.

To obtain 510(k) clearance, we must file with the FDA a pre-market notification demonstrating that our proposed device is substantially equivalent to a previously cleared and legally marketed 510(k) device or a device that was in commercial distribution before May 28, 1976 for which the FDA has not yet called for the submission of a PMA.

510(k) clearance for iovera° was first obtained in March 2009 when the focus of MyoScience was cosmetic applications (i.e.

facial wrinkle reduction).

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.

The second pathway, a PMA, requires an independent demonstration that a medical

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device is safe and effective for its intended use.

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

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

A PMA must be supported by extensive data including, but not limited to, technical, preclinical and clinical trials, manufacturing and labeling to demonstrate reasonable evidence of the device’s safety and efficacy to the FDA’s satisfaction.

510(k) clearance for a predecessor device to iovera° was first obtained in March 2009 when the focus of MyoScience was cosmetic applications (i.e.

facial wrinkle reduction).

After a device receives 510(k) clearance or a PMA approval, it may be changed or modified.

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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.

An adverse event is any undesirable experience associated with the use of a medical product in a patient.

A serious adverse event is an adverse event that results in death, is life-threatening or results in hospitalization or disability, among other things.

If the events suggest a new safety signal for the drug in question, that could lead to the need for additional safety statements in the labeling of the product or additional REMS.

Additionally, adverse events found in other drugs could also mean that we have to abide by additional safety measures and include warnings in our labeling.

Similar reporting and pharmacovigilance obligations exist with regulatory agencies outside the U.S.

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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

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

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.

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Both the PDMA and state laws limit the distribution of prescription pharmaceutical product samples and impose requirements to ensure accountability in distribution, including a drug pedigree which tracks the distribution of prescription drugs.

In December 2015, we announced that we achieved an amicable resolution with the U.S.

in our lawsuit filed in September 2015 against the FDA and other governmental defendants.

The resolution confirmed that EXPAREL is, and has been since its approval in 2011, broadly indicated for single-dose infiltration into the surgical site to produce postsurgical analgesia.

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

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.

Safety and efficacy has not been established in other nerve blocks.”

Medical Devices

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• QSRs, which require manufacturers, including third‑party manufacturers, to follow stringent design, testing, documentation and other quality assurance procedures during product design and throughout the manufacturing process;

• Labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or off‑label uses;

• 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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• Labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or off‑label uses;

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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Whether or not we obtain FDA approval for a product, we must obtain approval by the comparable regulatory authorities of foreign countries before we can commence clinical trials or marketing of the product in those countries.

The approval process varies from country to country, and the time may be longer or shorter than that required for FDA approval.

The approval process and requirements vary from country to country, and the time may be longer or shorter than that necessary for FDA approval.

For example, in Europe, there are several tracks for marketing approval for pharmaceuticals, for product approval and post-approval regulatory processes, depending on the type of product for which approval is sought.

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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 the United Kingdom, Canada, China and any other jurisdictions in which EXPAREL, iovera° or any other future product is approved.

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, the U.K., Canada and Latin America, 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 the U.K, Canada, Latin America and any other jurisdictions in which EXPAREL, ZILRETTA, iovera° or any other future product is approved.

Third-Party Payer Coverage and Reimbursement

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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.

Congress and state legislatures from time to time propose and adopt

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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.

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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.

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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Marketing/Data Exclusivity

Market exclusivity provisions under the FDCA can delay the submission or approval of certain applications of other companies seeking to reference another company’s NDA.

The FDA may grant three or five years of marketing exclusivity in the U.S.

for the approval of new or supplemental NDAs, including Section 505(b)(2) NDAs, for, among other things, new indications, dosages or dosage forms of an existing drug, if new clinical investigations that were conducted or sponsored by the applicant are essential to the approval of the application.

A drug is a new chemical entity if the FDA has not previously approved any other new drug containing the same active moiety, which is the molecule or ion responsible for the action of the drug substance.

During the exclusivity period, the FDA may not accept for review an Abbreviated New Drug Application, or ANDA, or a Section 505(b)(2) NDA submitted by another company for another version of such drug where the applicant does not own or have a legal right of reference to all the data required for approval.

However, such an application may be submitted after four years if it contains a certification of patent invalidity or non-infringement to one of the patents listed with the FDA by the innovator NDA holder.

The FDCA also provides three years of marketing exclusivity for an NDA, or supplement to an existing NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example new indications, dosages or strengths of an existing drug.

Additionally, six months of marketing exclusivity in the U.S.

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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.

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Manufacturing Requirements

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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

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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.

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Regenerative Medicine Advanced Therapies

As part of the 21 st Century Cures Act, Congress amended the FDCA to create the regenerative medicine advanced therapies, or RMAT, designation.

The RMAT designation is intended to facilitate efficient development and expedite review of regenerative medicine advanced therapies, which are intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition.

RMAT covers cell therapies, gene therapies, therapeutic tissue engineering products, human cell and tissue products, and combination products using any such therapies or products.

A sponsor may request that the FDA designate a regenerative medicine advanced therapy concurrently with or at any time after submission of an IND.

The FDA has 60 calendar days to determine whether the criteria are met, including whether there is preliminary clinical evidence indicating the potential to address unmet medical needs for a serious or life-threatening disease or condition.

A Biologics License Application (BLA) for a regenerative medicine advanced therapy may be eligible for priority review or accelerated approval through surrogate or intermediate endpoints reasonably likely to predict long-term clinical benefit, or reliance upon data obtained from a meaningful number of clinical trial sites.

Benefits of such designation also include early interactions with the FDA to discuss any potential surrogate or intermediate endpoint to be used to support accelerated approval.

A regenerative medicine advanced therapy that is granted accelerated approval and is subject to post-approval requirements may fulfill such requirements through the submission of clinical evidence, clinical studies, patient registries, or other sources of real-world evidence, such as electronic health records;

the collection of larger confirmatory data sets;

or post-approval monitoring of all patients treated with such therapy prior to its approval.

Healthcare Privacy and Security Laws

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Environmental Matters

Our research and development processes and our manufacturing processes involve the controlled use of hazardous materials and chemicals and produce waste products.

We are subject to federal, state and local laws and regulations governing the use, manufacture, storage, handling and disposal of hazardous materials and waste products.

We do not expect the cost of complying with these laws and regulations to be material.

Our research and development processes and our manufacturing processes involve the controlled use of hazardous materials and chemicals and produce waste products, including pharmaceutical residues.

We are subject to federal, state and local laws and regulations governing the use, manufacture, storage, handling and disposal of hazardous materials and waste products, including those related to pharmaceutical residues.

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.

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

It is possible, however, that environmental issues may arise in the future which we cannot now predict.

We are working towards improving our sustainable footprint through key practices like waste reduction, water recycling, and using energy efficient equipment where possible.

We have a focus on raising awareness and educating associates on reducing our internal use of consumables and natural resources.

In addition, we have a broad range of recycling and waste management initiatives at our manufacturing facilities and corporate offices.

For example, at our internal manufacturing facilities we have addressed our use and recycling of paper products, aluminum cans, glass, electronics and plastic, as well as disposal of non-recyclables and effective water management.

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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.

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

All employees receive information security training (including data protection and fraud awareness) on an annual basis, and we 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.

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

Corporate Citizenship

We are the industry leader in our commitment to non-opioid pain management and providing a non-opioid option to as many patients as possible to redefine the role of opioids as a rescue therapy only.

We are dedicated to the principles of social responsibility and good corporate governance.

Our Board of Directors is comprised of industry leaders with extensive and diverse experience spanning business and scientific leadership.

We hold ourselves to the highest standards and our Code of Business Conduct and Ethics reflects the business practices and principles of behavior that support this commitment.

We are deeply invested in the welfare of our patients and employees, the environment and the communities where we live and work.

We conduct our operations and manage our product and pipeline programs in a responsible manner and strive to comply with applicable laws, rules and regulations.

In 2021, we provided support for charitable medical missions in Honduras and Ghana by donating EXPAREL to help support surgeries for patients in need and have also supported the Louisiana State University Opioid Minimization Initiative as well as made a commitment to donate EXPAREL to not-for-profit children’s hospitals each year over the next three years.

Human Capital

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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 also offer our executives the opportunity to participate in a deferred compensation plan with an employer match.

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 regularly benchmark our

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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.

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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.

We offer our eligible employees flexible work arrangements—including remote working opportunities, flexible schedules and reduced schedules to help achieve an appropriate work/life balance.

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.

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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.

In support of this diversity, equity and inclusion vision, we have developed a strategy and multi-year roadmap, prioritizing education and training, and have also developed a global labor and human rights policy.

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 list our job postings on state job banks and distribute them to community engaged veteran, minority, women and diversity organizations.

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

In 2018, we established P.O.W.E.R.

(Preparing Our Women for Excellence and Results), an employee resource group open to all Pacira colleagues, focused on promoting leadership values, fostering a community of support and the advancement of women through professional development and networking opportunities.

In 2020, we established a cross-functional diversity, equity and inclusion employee council to serve as an advisory board, comprised of employees who lead, advocate for, inform and communicate our corporate diversity, equity and inclusion strategic initiatives around four key areas:

leadership development, diversity recruiting, culture and communications.

COVID-19 Pandemic

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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 amended our 401(k)

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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.

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

As of December 31, 2021, we had 697 employees, all of which are full-time.

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

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

30 of these employees are Flexion employees who remain with us on a transitional basis of up to eight months.

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

except for nine 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 corporate 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, and the inclusion of our website address in this Annual Report is an inactive textual reference only and is not intended to be an active link to our website.

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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