What changed in this filing

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Item 1. Financial Statements

2022-08-03 compared with 2022-05-04 · 417 added, 283 removed, 1066 unchanged (40% of the section changed)

30 unchanged sentences

Lease liabilities 67,575 71,727

Deferred revenue 10,125 10,125

Contingent consideration 35,247 57,598

5 unchanged sentences

5,000,000 shares authorized;

none issued and outstanding at March 31, 2022 and December 31, 2021

none issued and outstanding at June 30, 2022 and December 31, 2021

Common stock, par value $ 0.001 ;

250,000,000 shares authorized;

45,064,459 and 44,734,308 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively

45,801,578 and 44,734,308 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

Additional paid-in capital 895,151 942,091

Accumulated deficit ( 137,956 ) ( 211,895 )

Accumulated other comprehensive income (loss) ( 527 ) 167

Accumulated other comprehensive (loss) income ( 605 ) 167

Total stockholders’ equity 756,636 730,408

7 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Net product sales $ 168,581 $ 134,863 $ 326,003 $ 253,601

Royalty revenue 830 602 1,399 891

Collaborative licensing and milestone revenue — 125 — 125

Total revenues 169,411 135,590 327,402 254,617

4 unchanged sentences

Amortization of acquired intangible assets 14,322 1,967 28,644 3,933

Acquisition-related charges, product discontinuation and other 4,337 1,873

Acquisition-related (gains) charges, product discontinuation and other ( 18,058 ) 146 ( 13,721 ) 2,019

Total operating expenses 138,176 100,747 278,774 200,337

21 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Net income $ 19,876 $ 19,081 $ 26,704 $ 29,450

Other comprehensive income (loss):

Net unrealized loss on investments, net of tax ( 733 ) ( 150 )

Other comprehensive (loss) income:

Net unrealized (loss) gain on investments, net of tax ( 160 ) 12 ( 893 ) ( 138 )

Foreign currency translation adjustments 82 ( 3 ) 121 1

Total other comprehensive loss ( 694 ) ( 146 )

Total other comprehensive (loss) income ( 78 ) 9 ( 772 ) ( 137 )

Comprehensive income $ 19,798 $ 19,090 $ 25,932 $ 29,313

4 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021

FOR THE THREE MONTHS ENDED JUNE 30, 2022 AND 2021

(In thousands)

1 unchanged sentence

Capital Accumulated

Deficit Accumulated

Comprehensive

Income (Loss)

Deficit Accumulated Other Comprehensive (Loss) Income

Shares Amount Total

Balance at December 31, 2021 44,734 $ 45 $ 942,091 $ ( 211,895 ) $ 167 $ 730,408

Reclassification of the equity components of convertible senior notes to liability upon adoption of Accounting Standards Update 2020-06 (Note 2) — — ( 96,468 ) 47,235 — ( 49,233 )

Balance at March 31, 2022 45,064 $ 45 $ 867,890 $ ( 157,832 ) $ ( 527 ) $ 709,576

Exercise of stock options 307 1 10,856 — — 10,857

Vested restricted stock units 292 — — — — —

Common stock issued under employee stock

purchase plan 37 — 1,821 — — 1,821

Stock-based compensation — — 11,544 — — 11,544

Issuance of common stock upon conversion of 2022 convertible senior notes (Note 9) 102 — 3,040 — — 3,040

Other comprehensive loss (Note 11) — — — — ( 78 ) ( 78 )

Net income — — — 19,876 — 19,876

Balance at June 30, 2022 45,802 $ 46 $ 895,151 $ ( 137,956 ) $ ( 605 ) $ 756,636

Common Stock Additional

Capital Accumulated

Deficit Accumulated Other Comprehensive (Loss) Income

Shares Amount Total

Balance at March 31, 2021 43,958 $ 44 $ 894,108 $ ( 243,506 ) $ 172 $ 650,818

Exercise of stock options 162 — 5,225 — — 5,225

Vested restricted stock units 286 — — — — —

Common stock issued under employee stock

purchase plan 31 — 1,574 — — 1,574

Stock-based compensation — — 10,461 — — 10,461

Other comprehensive income (Note 11) — — — — 9 9

Net income — — — 19,081 — 19,081

Balance at June 30, 2021 44,437 $ 44 $ 911,368 $ ( 224,425 ) $ 181 $ 687,168

See accompanying notes to condensed consolidated financial statements.

Pacira BioSciences, Inc.

| Q2 2022 Form 10-Q | Page 7

PACIRA BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021

(In thousands)

Common Stock Additional

Capital Accumulated

Deficit Accumulated

Comprehensive

Income (Loss)

Deficit Accumulated Other Comprehensive (Loss) Income

Shares Amount Total

Balance at December 31, 2021 44,734 $ 45 $ 942,091 $ ( 211,895 ) $ 167 $ 730,408

Reclassification of the equity component of convertible senior notes to liabilities upon adoption of Accounting Standards Update 2020-06 (Note 2) — — ( 96,468 ) 47,235 — ( 49,233 )

Exercise of stock options 630 1 21,934 — — 21,935

Vested restricted stock units 299 — — — — —

Common stock issued under employee stock

purchase plan 37 — 1,821 — — 1,821

Stock-based compensation — — 22,733 — — 22,733

Issuance of common stock upon conversion of 2022 convertible senior notes (Note 9) 102 — 3,040 — — 3,040

Other comprehensive loss (Note 11) — — — — ( 772 ) ( 772 )

Net income — — — 26,704 — 26,704

Balance at March 31, 2021 43,958 $ 44 $ 894,108 $ ( 243,506 ) $ 172 $ 650,818

Balance at June 30, 2022 45,802 $ 46 $ 895,151 $ ( 137,956 ) $ ( 605 ) $ 756,636

Common Stock Additional

Capital Accumulated

Deficit Accumulated Other Comprehensive (Loss) Income

Shares Amount Total

Balance at December 31, 2020 43,637 $ 44 $ 873,201 $ ( 253,875 ) $ 318 $ 619,688

Exercise of stock options 479 — 16,022 — — 16,022

Vested restricted stock units 290 — — — — —

Common stock issued under employee stock

purchase plan 31 — 1,574 — — 1,574

Stock-based compensation — — 20,571 — — 20,571

Other comprehensive loss (Note 11) — — — — ( 137 ) ( 137 )

Net income — — — 29,450 — 29,450

Balance at June 30, 2021 44,437 $ 44 $ 911,368 $ ( 224,425 ) $ 181 $ 687,168

See accompanying notes to condensed consolidated financial statements.

4 unchanged sentences

(In thousands)

Three Months Ended

Six Months Ended

Operating activities:

16 unchanged sentences

Other liabilities 479 ( 964 )

Payment of contingent consideration — ( 5,662 )

Net cash provided by operating activities 60,583 42,215

5 unchanged sentences

Purchases of equity and debt investments ( 12,750 ) ( 14,220 )

Sale of equity investment — 9,057

Net cash used in investing activities ( 188,858 ) ( 52,631 )

1 unchanged sentence

Proceeds from exercises of stock options 21,881 15,997

Proceeds from shares issued under employee stock purchase plan 1,821 1,574

Repayment of 2022 convertible senior notes ( 156,960 ) —

Net cash provided by (used in) financing activities ( 181,585 ) 10,325

Net decrease in cash and cash equivalents ( 358,827 ) ( 33,258 )

Repayment of 2024 convertible senior notes ( 192,609 ) —

Repayment of Term loan B facility maturing December 2026 ( 9,375 ) —

Payment of contingent consideration to MyoScience, Inc.

securityholders — ( 1,338 )

Net cash (used in) provided by financing activities ( 335,242 ) 16,233

Net (decrease) increase in cash and cash equivalents ( 463,517 ) 5,817

Cash and cash equivalents, beginning of period 585,578 99,957

4 unchanged sentences

Non-cash investing and financing activities:

Issuance of common stock from conversion of 2022 convertible senior notes $ 3,040 $ —

Fixed assets included in accounts payable and accrued liabilities $ 2,454 $ 8,096

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and its subsidiaries (collectively, the “Company” or “Pacira”) is the industry leader in its 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 rescue therapy only.

The company is also developing innovative interventions to address debilitating conditions involving the sympathetic nervous system, such as cardiac electrical storm, chronic pain and spasticity.

The Company’s long-acting, local analgesic, EXPAREL ® (bupivacaine liposome injectable suspension), was commercially launched in the United States, or U.S., in April 2012 and approved in select European countries and the United Kingdom, or U.K.

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Accordingly, the Company views its business as one reportable segment to evaluate performance, allocate resources, set operational targets and forecast its future financial results.

Coronavirus (COVID-19) Pandemic

Since early 2020, the Company’s revenues have been impacted by the global pandemic caused by a novel strain of coronavirus (COVID-19) and pandemic-related challenges that included the significant postponement or suspension in the scheduling of elective surgical procedures due to public health guidance and government directives.

Coronavirus (COVID-19) Pandemic and Global Economic Conditions

Since early 2020, the Company’s revenues have been impacted by COVID-19 pandemic-related challenges that included the significant postponement or suspension in the scheduling of elective surgical procedures due to public health guidance and government directives.

While the degree of impact has diminished during the course of the pandemic due to the introduction of vaccines and therapeutics, as well as the lessening of elective surgery restrictions, certain pandemic-related operational and staffing challenges persist.

For instance, while many restrictions have since eased with COVID-19 vaccines now widely available, the elective surgery market faced additional pandemic-related challenges in August and September 2021 due to regional surges in COVID-19 variant cases, staffing shortages and fatigue from care teams addressing significant procedure backlogs, and in December 2021, the COVID-19 Omicron variant prompted some government restrictions on elective surgical procedures and created surgical staffing challenges, both of which began to ease in January 2022.

The Company’s manufacturing sites are operational and have safety protocols and guidelines as recommended by federal, state and local governments.

Indirect effects of the pandemic may include longer lead-times for or the inability to secure a sufficient supply of materials due to the prioritization by certain suppliers for COVID-19 vaccine manufacturing.

It remains unclear how long it will take the elective surgery market to normalize or if restrictions on elective procedures will recur due to future COVID-19 variants or otherwise.

Direct effects of the pandemic and global economic conditions may negatively impact the Company’s business, financial condition and results of operations.

Such impacts may include the effect of prolonged periods of inflation on the Company’s customers and suppliers and longer lead-times or the inability to secure a sufficient supply of materials.

The situation remains dynamic and subject to rapid and possibly material changes.

Additional negative impacts may also arise from the COVID-19 pandemic that the Company is unable to foresee.

Additional negative impacts may also arise that the Company is unable to foresee.

The nature and extent of such impacts will depend on future developments, which are highly uncertain and cannot be predicted.

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Therefore, these interim condensed consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 .

The condensed consolidated financial statements at June 30, 2022, and for the three and six-month periods ended June 30, 2022 and 2021, are unaudited, but include all adjustments (consisting of only normal recurring adjustments) which, in the

Pacira BioSciences, Inc.

| Q2 2022 Form 10-Q | Page 10

The condensed consolidated financial statements at March 31, 2022, and for the three-month periods ended March 31, 2022 and 2021, are unaudited, but include all adjustments (consisting of only normal recurring adjustments) which, in the opinion of management, are necessary to present fairly the financial information set forth herein in accordance with GAAP.

opinion of management, are necessary to present fairly the financial information set forth herein in accordance with GAAP.

The condensed consolidated balance sheet at December 31, 2021 is derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

12 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Largest wholesaler 32 % 31 % 31 % 31 %

2 unchanged sentences

Total 77 % 86 % 76 % 86 %

The percentage of revenues from the Company’s three largest wholesalers have shifted in the current year with the integration of ZILRETTA sales in 2022.

The percentage of revenues from the Company’s three largest wholesalers have shifted in the current year with the addition of ZILRETTA sales.

Recently Adopted Accounting Pronouncements

4 unchanged sentences

Instead, the Company accounts for its convertible debt instruments wholly as debt.

In addition, the Company did not record interest expense on the previously recorded discount on its convertible debt.

In addition, effective on January 1, 2022, the Company did not record interest expense on the previously recorded discount on its convertible debt.

The impact on the condensed consolidated balance sheet at January 1, 2022 increased net debt by approximately $ 64.9 million, reduced accumulated deficit by $ 47.2 million, reduced additional paid-in capital by $ 96.5 million and decreased deferred tax liabilities by $ 15.7 million.

23 unchanged sentences

Accounts Receivable

The majority of accounts receivable arise from product sales and represent amounts due from wholesalers, hospitals, ambulatory surgery centers, specialty distributors, specialty pharmacy, Group Purchasing Organizations and doctors.

Payment terms generally range from zero to 97 days from the date of the transaction, and accordingly, there is no significant financing component.

12 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Net product sales:

12 unchanged sentences

Up to an additional $ 380.2 million in the aggregate may be payable to holders of the CVRs if each of the applicable milestones are achieved.

No contingent consideration milestones were achieved in the six months ended June 30, 2022.

See Note 10 , Financial Instruments , for information regarding the methodology and key assumptions used in the fair value measurements of contingent consideration and for more information regarding the changes in fair value.

Pacira BioSciences, Inc.

| Q2 2022 Form 10-Q | Page 13

The Company is finalizing its valuation of intangible assets, liabilities and tax analyses, and anticipates finalizing the purchase price allocation as the information necessary to complete the analysis is obtained, but no later than one year after the acquisition date.

The Company is finalizing its valuation of liabilities and tax analyses, and anticipates finalizing the purchase price allocation as the information necessary to complete the analysis is obtained, but no later than one year after the acquisition date.

The following table sets forth the preliminary allocation of the Flexion Acquisition purchase price to the estimated fair value of the net assets acquired at the acquisition date (in thousands):

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(a) As previously reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

(b) Represents pre-acquisition expenses that were paid by the Company in 2022.

(b) Represents pre-acquisition expenses that were paid by the Company in 2022, partially offset by the release of estimated reserves.

Unaudited Pro Forma Summary of Operations

The following table shows the unaudited pro forma summary of operations for the three months ended March 31, 2021, as if the Flexion Acquisition had occurred on January 1, 2020.

The following table shows the unaudited pro forma summary of operations for the three and six-month periods ended June 30, 2021, as if the Flexion Acquisition had occurred on January 1, 2020.

This pro forma information does not purport to represent what the Company’s actual results would have been if the Flexion Acquisition had occurred as of January 1, 2020, and is not indicative of what such results would be expected for any future period (in thousands, except per share amounts):

Three Months Ended

March 31, 2021

June 30, 2021 Six Months Ended

June 30, 2021

Total revenues $ 163,765 $ 307,381

3 unchanged sentences

The summary pro forma financial information primarily reflects the following pro forma adjustments:

• Recognition of the income tax benefit resulting from decreasing Flexion’s existing valuation allowance on deferred tax assets for the three months ended March 31, 2021;

• Recognition of the income tax benefit resulting from decreasing Flexion’s existing valuation allowance on deferred tax assets for the three and six months ended June 30, 2021;

Pacira BioSciences, Inc.

9 unchanged sentences

The components of inventories, net are as follows (in thousands):

March 31, December 31,

June 30, December 31,

Raw materials $ 36,301 $ 36,337

4 unchanged sentences

Fixed assets, net, summarized by major category, consist of the following (in thousands):

March 31, December 31,

June 30, December 31,

Machinery and equipment $ 116,364 $ 117,264

6 unchanged sentences

Fixed assets, net $ 191,279 $ 188,401

For the three months ended March 31, 2022 and 2021, depreciation expense was $ 5.7 million and $ 2.9 million, respectively.

For the three months ended March 31, 2022 and 2021, there was $ 0.8 million and $ 1.0 million of capitalized interest on the construction of manufacturing sites, respectively.

At March 31, 2022 and December 31, 2021, total fixed assets, net includes leasehold improvements and manufacturing process equipment located in Europe in the amount of $ 62.8 million and $ 65.4 million, respectively.

As of March 31, 2022 and December 31, 2021, the Company had asset retirement obligations of $ 3.0 million and $ 2.4 million, respectively, included in accrued expenses and other liabilities on its condensed consolidated balance sheet, for costs associated with returning leased spaces to their original condition upon the termination of certain lease agreements.

For the three months ended June 30, 2022 and 2021, depreciation expense was $ 6.5 million and $ 2.9 million, respectively.

For the three months ended June 30, 2022 and 2021, there was $ 1.0 million and $ 1.1 million of capitalized interest on the construction of manufacturing sites, respectively.

For the six months ended June 30, 2022 and 2021, depreciation expense was $ 12.2 million and $ 5.8 million, respectively.

For the six months ended June 30, 2022 and 2021, there was $ 1.8 million and $ 2.1 million of capitalized interest on the construction of manufacturing sites, respectively.

At June 30, 2022 and December 31, 2021, total fixed assets, net includes leasehold improvements and manufacturing process equipment located in Europe in the amount of $ 60.0 million and $ 65.4 million, respectively.

As of June 30, 2022 and December 31, 2021, the Company had asset retirement obligations of $ 3.1 million and $ 2.4 million, respectively, included in accrued expenses and other liabilities on its condensed consolidated balance sheet, for costs associated with returning leased spaces to their original condition upon the termination of certain lease agreements.

Pacira BioSciences, Inc.

1 unchanged sentence

NOTE 7— LEASES

The Company leases all of its facilities, including its EXPAREL manufacturing facility in San Diego, California and its iovera° manufacturing facility in Fremont, California.

The Company leases all of its facilities, including its EXPAREL and iovera° manufacturing facility in San Diego, California.

These leases have remaining terms up to 8.2 years, some of which provide renewal options at the then-current market value.

3 unchanged sentences

Total operating lease costs are as follows (in thousands):

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2022 2021 2022 2021

Fixed lease costs $ 3,542 $ 2,922 $ 7,069 $ 5,843

2 unchanged sentences

Supplemental cash flow information related to operating leases is as follows (in thousands):

Three Months Ended

Six Months Ended

Cash paid for operating lease liabilities, net of lease incentive $ 6,637 $ 7,177

7 unchanged sentences

Year Aggregate Minimum Payments Due

2022 (remaining nine months) $ 9,867

2022 (remaining six months) $ 6,509

Thereafter 39,422

4 unchanged sentences

| Q2 2022 Form 10-Q | Page 16

As of March 31, 2022, the Company has entered into one lease agreement not included above as the Company has not yet taken possession of the property.

As of June 30, 2022, the Company has entered into one lease agreement not included above as the Company has not yet taken possession of the property.

When the lease commences, the future lease obligations will be as follows (in thousands):

Year Aggregate Minimum Payments Due

2022 (remaining nine months) $ 239

2022 (remaining six months) $ 81

Thereafter 443

Total future lease payments $ 2,518

Additionally, in April 2022, the Company entered into an agreement to sublease the former Flexion research and development laboratory in Woburn, Massachusetts.

As of March 31, 2022, the associated ROU asset is $ 0.4 million, in which future cash to be received under this sublease agreement is expected to exceed the ROU asset by $ 0.1 million.

Subsequent to June 30, 2022, the Company entered into a sublease for the former Flexion research and development laboratory in Woburn, Massachusetts in July 2022 which resulted in a $ 0.4 million ROU asset to be reclassified to a fixed asset.

NOTE 8— GOODWILL AND INTANGIBLE ASSETS

1 unchanged sentence

(the Company’s California operating subsidiary) from SkyePharma Holding, Inc., or Skyepharma, (now a subsidiary of Vectura Group plc) in March 2007 (the “Skyepharma Acquisition”), MyoScience, Inc., or MyoScience, (the “MyoScience Acquisition”) in April 2019 and the Flexion Acquisition in November 2021.

The balances at March 31, 2022 and December 31, 2021 were $ 145.7 million and $ 145.2 million, respectively.

The increase was due to a measurement period adjustment associated with the Flexion Acquisition.

The balances at June 30, 2022 and December 31, 2021 were $ 146.1 million and $ 145.2 million, respectively.

The increase was due to measurement period adjustments associated with the Flexion Acquisition.

See Note 4, Flexion Acquisition, for more information.

4 unchanged sentences

Intangible assets, net, consist of the in-process research and development, or IPR&D, and developed technology from the Flexion Acquisition and developed technology and customer relationships from the MyoScience Acquisition and are summarized as follows (dollar amounts in thousands):

March 31, 2022 Gross Carrying Value Accumulated

June 30, 2022 Gross Carrying Value Accumulated

Amortization Intangible

13 unchanged sentences

Total intangible assets, net $ 651,090 $ ( 27,122 ) $ 623,968

Amortization expense on intangible assets for the three and six months ended June 30, 2022 was $ 14.3 million and $ 28.6 million, respectively.

Amortization expense on intangible assets for the three and six months ended June 30, 2021 was

Pacira BioSciences, Inc.

| Q2 2022 Form 10-Q | Page 17

Amortization expense was $ 14.3 million and $ 2.0 million for the three months ended March 31, 2022 and 2021, respectively.

The increase in amortization expense is a result of the amortization of ZILRETTA for osteoarthritis knee pain acquired as part of the Flexion Acquisition in November 2021.

Assuming no changes in the gross carrying amount of these intangible assets, the future estimated amortization expense on the finite-lived intangible assets will be $ 43.0 million for the remaining nine months of 2022, $ 57.3 million from 2023 to 2030, $ 37.4 million in 2031, $ 7.9 million in 2032 and $ 2.2 million in 2033.

$ 2.0 million and $ 3.9 million, respectively.

The increase in amortization expense in the current year is a result of the amortization of ZILRETTA for osteoarthritis knee pain acquired as part of the Flexion Acquisition in November 2021.

Assuming no changes in the gross carrying amount of these intangible assets, the future estimated amortization expense on the finite-lived intangible assets will be $ 28.6 million for the remaining six months of 2022, $ 57.3 million from 2023 to 2030, $ 37.4 million in 2031, $ 7.9 million in 2032 and $ 2.2 million in 2033.

The Company reviews its long-lived assets for impairment whenever an event or change in circumstances arise that indicate the carrying amount of an asset group is at risk of not being recoverable.

A triggering event was identified for the ZILRETTA asset group due to a reduction in the near-term projected cash flows from the ZILRETTA product.

The Company completed an impairment assessment through a recoverability test at June 30, 2022 by comparing the net carrying value of ZILRETTA asset group against the undiscounted net cash flows expected to be generated from ZILRETTA.

It was determined that the ZILRETTA asset group was recoverable and not impaired.

The carrying value of the Company’s outstanding debt is summarized as follows (in thousands):

March 31, December 31,

June 30, December 31,

Term loan B facility maturing December 2026 $ 352,120 $ 359,497

4 unchanged sentences

2.375 % Convertible senior notes due April 2022 (1)

160,000 157,857

Total $ 755,654 $ 1,049,230

6 unchanged sentences

The total debt composition of the Term Loan is as follows (in thousands):

March 31, December 31,

June 30, December 31,

Term Loan maturing December 2026 $ 365,625 $ 375,000

3 unchanged sentences

The Term Loan matures on December 7, 2026 and requires quarterly repayments of principal in the amount of $ 9.4 million commencing June 30, 2022, increasing to $ 14.1 million commencing December 31, 2025, with a remaining balloon payment of approximately $ 188.0 million due at maturity.

During 2022, the Company will be required to make three quarterly payments totaling $ 28.1 million.

During 2022, the Company is required to make three quarterly payments totaling $ 28.1 million.

The Company is also required to make mandatory prepayments of principal from (i) the Company’s excess cash flow (as defined in the Credit Agreement) existing in any fiscal year and if the Senior Secured Leverage Ratio (as defined in the Credit Agreement) for such fiscal year exceeds certain predetermined limits (ii) net proceeds (as defined in the Credit Agreement) of non-ordinary course assets sales and casualty events and (iii) debt issuance proceeds (other than permitted debt under the Credit Agreement).

1 unchanged sentence

Prepayment penalties generally do not apply to mandatory prepayment obligations under the Credit Agreement, such as prepayments due in connection with excess cash flow.

The Term Loan requires the Company to, among other things, maintain (i) a first lien net leverage ratio, determined as of the last day of any fiscal quarter, of no greater than 1.75 to 1.00 and (ii) liquidity, at any time, of at least $ 150.0 million.

The Term Loan also contains customary affirmative and negative covenants, financial covenants, representations and warranties, events of default and other provisions.

As of March 31, 2022, the Company was in compliance with all financial covenants under the Credit Agreement.

During the three and six months ended June 30, 2022, the Company made a scheduled principal payment of $ 9.4 million.

Pacira BioSciences, Inc.

| Q2 2022 Form 10-Q | Page 18

The Term Loan also contains customary affirmative and negative covenants, financial covenants, representations and warranties, events of default and other provisions.

As of June 30, 2022, the Company was in compliance with all financial covenants under the Credit Agreement.

The Company may elect to borrow either term benchmark borrowings or alternate base rate borrowings.

1 unchanged sentence

Alternate base rate borrowings bear interest at a variable rate per annum determined using a base rate (subject to a 175 basis points floor) equal to the greatest of (i) the Prime Rate (as defined in the Credit Agreement) in effect on such day, (ii) the NYFRB Rate (as defined in the Credit Agreement) plus 50 basis points or (iii) the Adjusted Term SOFR Rate (as defined in the Credit Agreement) plus 100 basis points, subject to certain exceptions, plus an applicable margin of 600 basis points.

As of March 31, 2022, borrowings under the Term Loan consisted entirely of term benchmark borrowings at a rate of 7.75 %.

As of June 30, 2022, borrowings under the Term Loan consisted entirely of term benchmark borrowings at a rate of 7.81 %.

Convertible Senior Notes Due 2025

3 unchanged sentences

The total debt composition of the 2025 Notes is as follows (in thousands):

March 31, December 31,

June 30, December 31,

0.750 % convertible senior notes due August 2025

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Holders may convert the 2025 Notes at any time prior to February 3, 2025, only if certain circumstances are met, including if during the previous calendar quarter, the last reported sales price of the Company’s common stock was greater than 130 % of the conversion price then applicable for at least 20 out of the last 30 consecutive trading days of the quarter.

During the quarter ended March 31, 2022, this condition for conversion was not met.

During the quarter ended June 30, 2022, this condition for conversion was not met.

On or after February 3, 2025, until the close of business on the second scheduled trading day immediately preceding August 1, 2025, holders may convert their 2025 Notes at any time.

4 unchanged sentences

The initial conversion price of the 2025 Notes represents a premium of approximately 32.5 % to the closing sale price of $ 54.17 per share of the Company’s common stock on the Nasdaq Global Select Market on July 7, 2020, the date that the Company priced the private offering of the 2025 Notes.

As of March 31, 2022, the 2025 Notes had a market price o f $1,241 pe r $1,000 principal amount.

As of June 30, 2022, the 2025 Notes had a market price o f $1,038 pe r $1,000 principal amount.

In the event of conversion, holders would forgo all future interest payments, any unpaid accrued interest and the possibility of further stock price appreciation.

Upon the receipt of conversion requests, the settlement of the 2025 Notes will be paid pursuant to the terms of the 2025 Indenture.

In the event that all of the 2025 Notes are converted, the Company would be required to repay the $ 402.5 million in principal value and any conversion premium in any combination of cash and shares of its common stock (at the Company’s option).

Prior to August 1, 2023, the Company may not redeem the 2025 Notes.

In the event that all of the 2025 Notes are converted, the Company would be required to repay the

Pacira BioSciences, Inc.

| Q2 2022 Form 10-Q | Page 19

least 20 trading days (whether or not consecutive) during any 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related notice of redemption and (ii) the trading day immediately before the date the Company sends such notice.

$ 402.5 million in principal value and any conversion premium in any combination of cash and shares of its common stock (at the Company’s option).

Prior to August 1, 2023, the Company may not redeem the 2025 Notes.

On or after August 1, 2023 (but, in the case of a redemption of less than all of the outstanding 2025 Notes, no later than the 40 th scheduled trading day immediately before the maturity date), the Company may redeem for cash all or part of the 2025 Notes if the last reported sale price (as defined in the 2025 Indenture) of the Company’s common stock has been at least 130 % of the conversion price then in effect for (i) each of at least 20 trading days (whether or not consecutive) during any 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related notice of redemption and (ii) the trading day immediately before the date the Company sends such notice.

The redemption price will equal the sum of (i) 100 % of the principal amount of the 2025 Notes being redeemed, plus (ii) accrued and unpaid interest, including additional interest, if any, to, but excluding, the redemption date.

1 unchanged sentence

No sinking fund is provided for the 2025 Notes.

While the 2025 Notes are currently classified on the Company’s condensed consolidated balance sheet at March 31, 2022 as long-term debt, the future convertibility and resulting balance sheet classification of this liability is monitored at each quarterly reporting date and is analyzed dependent upon market prices of the Company’s common stock during the prescribed measurement periods.

While the 2025 Notes are currently classified on the Company’s condensed consolidated balance sheet at June 30, 2022 as long-term debt, the future convertibility and resulting balance sheet classification of this liability is monitored at each quarterly reporting date and is analyzed dependent upon market prices of the Company’s common stock during the prescribed measurement periods.

In the event that the holders of the 2025 Notes have the election to convert the 2025 Notes at any time during the prescribed measurement period, the 2025 Notes would then be considered a current obligation and classified as such.

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No Flexion 2024 Notes were converted in connection with the Notice.

At March 31, 2022, the remaining principal outstanding is $ 8.6 million.

At June 30, 2022, the remaining principal outstanding is $ 8.6 million.

Pacira BioSciences, Inc.

| Q2 2022 Form 10-Q | Page 20

Convertible Senior Notes Due 2022

1 unchanged sentence

The 2022 Notes accrued interest at a fixed rate of 2.375 % per year, payable semiannually in arrears on April 1 st and October 1 st of each year.

As discussed above, in July 2020, the Company used part of the net proceeds from the issuance of the 2025 Notes to repurchase $ 185.0 million aggregate principal amount of the 2022 Notes in privately-negotiated transactions for an aggregate of $ 211.1 million in cash (including accrued interest).

Pacira BioSciences, Inc.

| Q1 2022 Form 10-Q | Page 19

In July 2020, the Company used part of the net proceeds from the issuance of the 2025 Notes to repurchase $ 185.0 million aggregate principal amount of the 2022 Notes in privately-negotiated transactions for an aggregate of $ 211.1 million in cash (including accrued interest).

The total debt composition of the 2022 Notes is as follows (in thousands):

March 31, December 31,

June 30, December 31,

2.375 % convertible senior notes due April 2022

3 unchanged sentences

Total debt, net of debt discount and deferred financing costs $ — $ 157,857

Subsequently, on April 1, 2022, the 2022 Notes matured, and the Company settled the remaining outstanding principal balance of $ 160.0 million and a conversion premium of $ 4.8 million through a cash payment of $ 156.9 million and the issuance of 101,521 shares of the Company’s common stock.

On April 1, 2022, the 2022 Notes matured and the Company settled the remaining outstanding principal balance of $ 160.0 million and a conversion premium of $ 4.8 million through a cash payment of $ 156.9 million and the issuance of 101,521 shares of the Company’s common stock, which increased additional paid-in capital by $ 3.0 million.

Interest Expense

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Contractual interest expense $ 8,196 $ 1,713 $ 17,381 $ 3,418

19 unchanged sentences

The fair value hierarchy gives the lowest priority to Level 3 inputs.

Pacira BioSciences, Inc.

| Q2 2022 Form 10-Q | Page 21

The carrying value of financial instruments including cash and cash equivalents, accounts receivable and accounts payable approximate their respective fair values due to the short-term nature of these items.

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The carrying amounts of equity investments and convertible notes receivable without readily determinable fair values have not been adjusted for either an impairment or upward or downward adjustments based on observable transactions.

Pacira BioSciences, Inc.

| Q1 2022 Form 10-Q | Page 20

At March 31, 2022, the carrying values and fair values of the following financial assets and liabilities were as follows (in thousands):

At June 30, 2022, the carrying values and fair values of the following financial assets and liabilities were as follows (in thousands):

Carrying Value Fair Value Measurements Using

12 unchanged sentences

$ 8,640 $ — $ 8,606 $ —

2.375 % convertible senior notes due 2022 (3)

$ 160,000 $ — $ 163,600 $ —

(1) The fair value of the 2025 Notes was based on the Company’s closing stock price of $ 76.32 per share at March 31, 2022 compared to a conversion price of $ 71.78 per share which, if converted, would result in an approximate conversion premium of 0.3 million shares or $ 25.5 million of cash.

The maximum conversion premium that can be due on the 2025 Notes is 5.6 million shares, which assumes no increases in the conversion rate for certain corporate events.

(1) The closing price of the Company’s common stock as reported on the Nasdaq Global Select Market was $ 58.30 per share at June 30, 2022 compared to a conversion price of $ 71.78 per share.

Therefore, at June 30, 2022, the conversion price was above the stock price.

The maximum conversion premium that could have been due on the 2025 Notes is 5.6 million shares of the Company’s common stock, which assumes no increase in the conversion rate for certain corporate events.

(2) Relates to the Flexion 2024 Notes.

For more information, See Note 9, Debt .

(3) The 2022 Notes matured on April 1, 2022.

For more information, See Note 9, Debt .

Equity and Convertible Note Investments

6 unchanged sentences

Foreign currency adjustments — ( 83 ) ( 83 )

Balance at March 31, 2022

Balance at June 30, 2022

$ 25,627 $ 5,299 $ 30,926

Pacira BioSciences, Inc.

| Q2 2022 Form 10-Q | Page 22

Acquisition-Related Contingent Consideration

The Company has recognized contingent consideration related to the Flexion Acquisition and the MyoScience Acquisition in the amount of $ 56.5 million and $ 57.6 million as of March 31, 2022 and December 31, 2021, respectively.

The Company has recognized contingent consideration related to the Flexion Acquisition and the MyoScience Acquisition in the amount of $ 35.2 million and $ 57.6 million as of June 30, 2022 and December 31, 2021, respectively.

The Company’s contingent consideration obligations are recorded at their estimated fair values and are revalued each reporting period if and until the related contingencies are resolved.

2 unchanged sentences

Significant changes may increase or decrease the probabilities of achieving the related commercial and regulatory events, shorten or lengthen the time required to achieve such events, or increase or decrease estimated forecasts.

In November 2021, as part of the purchase price consideration related to the Flexion Acquisition, the Company recorded contingent consideration of $ 45.2 million, which represents the Company’s potential achievement of meeting regulatory and sales-based milestones.

For the period from the date of the Flexion Acquisition through December 31, 2021, the Company recorded an additional $ 1.2 million liability due to an estimated $ 0.02 fair value increase to contingent consideration per CVR.

During the three months ended March 31, 2022 , the Company recorded a $ 0.8 million credit due to a decrease in the fair value of contingent consideration.

These adjustments were recorded as acquisition-related charges in the condensed consolidated

Pacira BioSciences, Inc.

| Q1 2022 Form 10-Q | Page 21

statements of operations.

At March 31, 2022, the weighted average discount rate was 12.6 % and the weighted average probability of success for regulatory milestones was 11.7 %.

As of March 31, 2022 and December 31, 2021, a contingent consideration liability related to the Flexion Acquisition was recognized in the amount of $ 45.6 million and $ 46.4 million, respectively.

In November 2021, the Company completed the Flexion Acquisition, which provided for contingent consideration related to CVRs that were issued to Flexion shareholders and certain equity award holders which could aggregate up to a total of $ 425.5 million if certain regulatory and commercial milestones are met.

The Company’s obligation to make milestone payments is limited to those milestones achieved through December 31, 2030, and are to be paid within 60 days of the end of the fiscal quarter of achievement.

As part of the purchase price consideration related to the Flexion Acquisition, the Company recorded contingent consideration of $ 45.2 million, which represented the Company’s potential achievement of meeting the regulatory and commercial milestones.

For the period from the date of the Flexion Acquisition through December 31, 2021, the Company recorded an additional $ 1.2 million liability.

During the three and six months ended June 30, 2022 , the Company recorded gains of $ 12.5 million and $ 13.3 million, respectively, primarily due to adjustments to near-term forecasts for the earnout period of the contingent consideration.

These adjustments were recorded as acquisition-related gains in the condensed consolidated statements of operations.

At June 30, 2022, the weighted average discount rate was 13.5 % and the weighted average probability of success for regulatory milestones was 11.1 %.

As of June 30, 2022 and December 31, 2021, a contingent consideration liability related to the Flexion Acquisition was recognized in the amount of $ 33.1 million and $ 46.4 million, respectively.

In April 2019, the Company completed the MyoScience Acquisition pursuant to the terms of an Agreement and Plan of Merger, which provided for contingent milestone payments of up to an aggregate of $ 100.0 million upon the achievement of certain regulatory and commercial milestones.

The Company’s obligation to make milestone payments is limited to those milestones achieved through December 31, 2023, and are to be paid within 60 days of the end of the fiscal quarter of achievement.

As of March 31, 2022, the maximum potential remaining milestone payments to be paid are $ 43.0 million.

The Company recognized contingent consideration credits of $ 0.3 million and $ 1.1 million during the three months ended March 31, 2022 and 2021, respectively .

At March 31, 2022, the weighted average discount rate was 11.3 % and the probability of success for the regulatory milestone that has not yet been met was 1.0 %.

As of March 31, 2022 and December 31, 2021, a contingent consideration liability related to the MyoScience Acquisition has been recognized in the amounts of $ 10.9 million and $ 11.2 million, respectively.

As of June 30, 2022, the maximum potential remaining milestone payments to be paid are $ 43.0 million.

The Company recognized contingent consideration gains of $ 8.8 million and $ 9.0 million during the three and six months ended June 30, 2022 , respectively, due to the reduced probability of meeting the contingent consideration milestones by December 31, 2023, the expiration date for achieving the milestones.

The Company recognized a $ 0.1 million contingent consideration charge and a $ 1.0 million gain during the three and six months ended June 30, 2021 , respectively .

At June 30, 2022, the weighted average discount rate was 12.5 % and the probability of success for the regulatory milestone that has not yet been met was reduced to zero .

As of June 30, 2022 and December 31, 2021, a contingent consideration liability related to the MyoScience Acquisition has been recognized in the amounts of $ 2.1 million and $ 11.2 million, respectively.

The following table includes the key assumptions used in the valuation of the Company’s contingent consideration:

1 unchanged sentence

Utilized as of

March 31, 2022

June 30, 2022

MyoScience Ranges

Utilized as of

March 31, 2022

June 30, 2022

Discount rates 12.64 % to 14.37 %

6 unchanged sentences

Fair value adjustments and accretion ( 22,351 )

Balance at March 31, 2022 $ 56,527

Balance at June 30, 2022

Pacira BioSciences, Inc.

| Q2 2022 Form 10-Q | Page 23

Available-for-Sale Investments

1 unchanged sentence

Net unrealized gains and losses (excluding credit losses, if any) from the Company’s short-term investments are reported in other comprehensive income (loss).

At March 31, 2022 and December 31, 2021, all of the Company’s short-term investments are classified as available-for-sale investments and are determined to be Level 2 instruments, which are measured at fair value using standard industry models with observable inputs.

At June 30, 2022 and December 31, 2021, all of the Company’s short-term investments are classified as available-for-sale investments and are determined to be Level 2 instruments, which are measured at fair value using standard industry models with observable inputs.

The fair value of the commercial paper is measured based on a standard industry model that uses the three-month U.S.

2 unchanged sentences

At the time of purchase, all short-term investments had an “A” or better rating by Standard & Poor’s.

Pacira BioSciences, Inc.

| Q1 2022 Form 10-Q | Page 22

The following summarizes the Company’s short-term available-for-sale investments at March 31, 2022 and December 31, 2021 (in thousands):

March 31, 2022 Investments Cost Gross

The following summarizes the Company’s short-term available-for-sale investments at June 30, 2022 and December 31, 2021 (in thousands):

June 30, 2022 Investments

Losses Fair Value

4 unchanged sentences

Total $ 195,430 $ — $ ( 1,098 ) $ 194,332

December 31, 2021 Investments Cost Gross

December 31, 2021 Investments

Losses Fair Value

3 unchanged sentences

Total $ 70,651 $ 182 $ ( 2 ) $ 70,831

At March 31, 2022, there were no investments available for sale that were materially less than their amortized cost.

At June 30, 2022, there were no investments available for sale that were materially less than their amortized cost.

The Company elects to recognize its interest receivable separate from its available-for-sale investments.

At March 31, 2022 and December 31, 2021, the interest receivable recognized in prepaid expenses and other current assets was $ 0.4 million and $ 0.1 million, respectively.

At June 30, 2022 and December 31, 2021, the interest receivable recognized in prepaid expenses and other current assets was $ 0.2 million and $ 0.1 million, respectively.

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term available-for-sale investments and accounts receivable.

1 unchanged sentence

Such amounts may exceed federally-insured limits.

As of March 31, 2022, three wholesalers each accounted for over 10% of the Company’s accounts receivable, at 34 %, 19 % and 19 %.

As of June 30, 2022, three wholesalers each accounted for over 10% of the Company’s accounts receivable, at 34 %, 17 % and 17 %.

At December 31, 2021, four wholesalers each accounted for over 10% of the Company’s accounts receivable, at 30 %, 20 %, 17 % and 11 %.

3 unchanged sentences

Allowances for credit losses on the Company’s accounts receivable are maintained based on historical payment patterns, current and estimated future economic conditions, aging of accounts receivable and its write-off history.

As of March 31, 2022 and December 31, 2021, the Company did no t deem any allowances for credit losses on its accounts receivable necessary.

As of June 30, 2022 and December 31, 2021, the Company did no t deem any allowances for credit losses on its accounts receivable necessary.

Pacira BioSciences, Inc.

| Q2 2022 Form 10-Q | Page 24

NOTE 11— STOCKHOLDERS’ EQUITY

Accumulated Other Comprehensive Income

The following tables illustrate the changes in the balances of the Company’s accumulated other comprehensive income (loss) for the periods presented (in thousands):

Net Unrealized Gains

(Losses) From Available

For Sale Investments Unrealized Foreign Currency Translation Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive (Loss) Income

The following tables illustrate the changes in the balances of the Company’s accumulated other comprehensive (loss) income for the periods presented (in thousands):

Net Unrealized (Loss) Gain From Available

For Sale Investments Unrealized Foreign Currency Translation Accumulated Other Comprehensive (Loss) Income

Balance at December 31, 2021

2 unchanged sentences

Foreign currency translation adjustments — 121 121

Balance at March 31, 2022

Balance at June 30, 2022

$ ( 754 ) $ 149 $ ( 605 )

Pacira BioSciences, Inc.

| Q1 2022 Form 10-Q | Page 23

Net Unrealized Gains

(Losses) From Available

For Sale Investments Unrealized Foreign Currency Translation Accumulated Other Comprehensive Income (Loss)

Net Unrealized (Loss) Gain From Available

For Sale Investments Unrealized Foreign Currency Translation Accumulated Other Comprehensive (Loss) Income

Balance at December 31, 2020

2 unchanged sentences

Foreign currency translation adjustments — 1 1

Balance at March 31, 2021

Balance at June 30, 2021

$ 181 $ — $ 181

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Cost of goods sold $ 1,478 $ 1,465 $ 2,830 $ 2,917

7 unchanged sentences

Total $ 11,544 $ 10,461 $ 22,733 $ 20,571

Pacira BioSciences, Inc.

| Q2 2022 Form 10-Q | Page 25

Equity Awards

The following tables contain information about the Company’s stock option and restricted stock unit, or RSU, activity for the three months ended March 31, 2022:

The following tables contain information about the Company’s stock option and restricted stock unit, or RSU, activity for the six months ended June 30, 2022:

Stock Options Number of Options Weighted Average Exercise Price (Per Share)

Outstanding at December 31, 2021

6,050,540 $ 49.32

Granted 1,010,780 60.22

2 unchanged sentences

Expired ( 13,054 ) 85.48

Outstanding at March 31, 2022 5,800,950 50.33

Outstanding at June 30, 2022

6,363,638 52.39

Restricted Stock Units Number of Units Weighted Average Grant Date Fair Value (Per Share)

Unvested at December 31, 2021

955,277 $ 52.85

Granted 568,049 60.63

1 unchanged sentence

Forfeited ( 44,929 ) 54.16

Unvested at March 31, 2022 981,953 53.38

Pacira BioSciences, Inc.

| Q1 2022 Form 10-Q | Page 24

The weighted average fair value of stock options granted during the three months ended March 31, 2022 wa s $ 27.71 per share.

Unvested at June 30, 2022

1,179,790 57.36

The weighted average fair value of stock options granted during the six months ended June 30, 2022 wa s $ 25.69 per share.

The fair values of stock options granted were estimated using the Black-Scholes option valuation model with the following weighted average assumptions:

Black-Scholes Weighted Average Assumption Three Months Ended March 31, 2022

Black-Scholes Weighted Average Assumption Six Months Ended June 30, 2022

Expected dividend yield None

3 unchanged sentences

Employee Stock Purchase Plan

The Company’s 2014 Employee Stock Purchase Plan, or ESPP, features two six-month offering periods per year, running from January 1 to June 30 and July 1 to December 31.

In June 2022, the Company’s stockholders approved the Amended and Restated 2014 Employee Stock Purchase Plan, or ESPP.

The ESPP was amended to increase the number of shares of common stock that may be sold under the ESPP by an additional 500,000 shares.

The ESPP features two six-month offering periods per year, running from January 1 to June 30 and July 1 to December 31.

Under the ESPP, employees may elect to contribute after-tax earnings to purchase shares at 85 % of the closing fair market value of the Company’s common stock on either the offering date or the purchase date, whichever is less.

During the three months ended March 31, 2022, no shares were purchased and issued through the ESPP.

During the six months ended June 30, 2022, 36,729 shares were purchased and issued through the ESPP.

Pacira BioSciences, Inc.

| Q2 2022 Form 10-Q | Page 26

NOTE 13— NET INCOME (LOSS) PER SHARE

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Potential common shares are excluded from the diluted net income (loss) per share computation to the extent they would be antidilutive.

The following table sets forth the computation of basic and diluted net income per common share for the three mon ths ended March 31, 2022 and 2021 (in thousands, except per share amounts):

Pacira BioSciences, Inc.

| Q1 2022 Form 10-Q | Page 25

The following table sets forth the computation of basic and diluted net income per common share for the three and six mon ths ended June 30, 2022 and 2021 (in thousands, except per share amounts):

Three Months Ended

Net income $ 6,828 $ 10,369

June 30, Six Months Ended

2022 2021 2022 2021

Net income—basic $ 19,876 $ 19,081 $ 26,704 $ 29,450

ASU 2020-06 convertible notes if-converted method adjustment 1,039 — 2,078 —

Adjusted net income—diluted 20,915 19,081 28,782 29,450

Weighted average common shares outstanding—basic 45,501 44,145 45,185 43,989

Computation of diluted securities:

ASU 2020-06 convertible notes if-converted method adjustment 5,607 — 5,607 —

Dilutive effect of stock options 1,016 1,062 1,106 1,284

6 unchanged sentences

Diluted net income per common share $ 0.40 $ 0.42 $ 0.55 $ 0.64

Pacira BioSciences, Inc.

| Q2 2022 Form 10-Q | Page 27

The following table summarizes the outstanding stock options, RSUs and convertible senior notes that were excluded from the diluted net income per common share calculation because the effects of including these potential shares were antidilutive in the periods presented (in thousands):

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Weighted average number of stock options 1,948 2,088 1,855 1,489

3 unchanged sentences

NOTE 14— INCOME TAXES

Income before income taxes is as follows (in thousands):

Income before income taxes and income tax expense is as follows (dollar amounts in thousands):

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Income (loss) before income taxes:

2 unchanged sentences

Total income before income taxes $ 22,007 $ 25,648 $ 29,301 $ 38,371

For the three months ended March 31, 2022 and 2021, the Company recognized income tax expense of $ 0.5 million and $ 2.4 million, respectively, which represented the estimated annual effective tax rate applied to the year-to-date domestic operating results adjusted for certain discrete tax benefits related to equity compensation.

Pacira BioSciences, Inc.

| Q1 2022 Form 10-Q | Page 26

NOTE 15— ACQUISITION–RELATED CHARGES, PRODUCT DISCONTINUATION AND OTHER

Acquisition-related charges, product discontinuation and other for the three months ended March 31, 2022 and 2021 summarized below (in thousands):

Income tax expense $ 2,131 $ 6,567 $ 2,597 $ 8,921

Effective tax rate 10 % 26 % 9 % 23 %

The Company’s income tax expense represents the estimated annual effective tax rate applied to the year-to-date domestic operating results adjusted for certain discrete tax items.

The Company’s effective tax rates for the three and six months ended June 30, 2022 include benefits related to stock-based compensation, a first quarter Skyepharma milestone payment and a fair value adjustment for Flexion contingent consideration, partially offset by non-deductible executive compensation costs and a valuation allowance against non-U.S.

The Company’s effective tax rates for the three and six months ended June 30, 2021 include benefits related to stock-based compensation offset by non-deductible executive compensation costs and valuation allowances recorded against deductible capital losses and non-U.S.

NOTE 15— ACQUISITION–RELATED (GAINS) CHARGES, PRODUCT DISCONTINUATION AND OTHER

Acquisition-related (gains) charges, product discontinuation and other for the three and six months ended June 30, 2022 and 2021 summarized below (in thousands):

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Severance-related expenses $ 950 $ — $ 4,065 $ —

6 unchanged sentences

agreement dissolution costs — — — 3,000

Total acquisition-related charges, product discontinuation and other $ 4,337 $ 1,873

Total acquisition-related (gains) charges, product discontinuation and other $ ( 18,058 ) $ 146 $ ( 13,721 ) $ 2,019

Pacira BioSciences, Inc.

| Q2 2022 Form 10-Q | Page 28

Flexion Acquisition

The Company recognized acquisition-related costs of $ 5.4 million, primarily severance, legal fees, third-party services and other one-time charges during the three months ended March 31, 2022 related to the Flexion Acquisition.

The Company recognized acquisition-related costs of $ 3.2 million and $ 8.6 million during the three and six months ended June 30, 2022, respectively , primarily for severance, legal fees, third-party services and other one-time charges related to the Flexion Acquisition.

See Note 4 , Flexion Acquisition , for more information.

On November 19, 2021, as part of the purchase price consideration related to the Flexion Acquisition, the Company recorded contingent consideration of $ 45.2 million, which represents the Company’s potential achievement of meeting regulatory and sales-based milestones.

During the three months ended March 31, 2022 , the Company recorded a $ 0.8 million credit due to a decrease to the fair value of its contingent consideration, which was included in acquisition-related charges in the condensed consolidated statements of operations.

See Note 10 , Financial Instruments , for information regarding the method and key assumptions used in the fair value measurements of contingent consideration.

During the three and six months ended June 30, 2022 , the Company recorded $ 12.5 million and $ 13.3 million gains, respectively, due to a decrease to the fair value of its contingent consideration, which was included in acquisition-related (gains) charges in the condensed consolidated statements of operations.

See Note 10 , Financial Instruments , for information regarding the method, key assumptions used in the fair value measurements of contingent consideration and more information regarding the changes in fair value.

MyoScience Acquisition

The Company recognized contingent consideration credits of $ 0.3 million and $ 1.1 million during the three months ended March 31, 2022 and 2021, respectively.

See Note 10 , Financial Instruments , for information regarding the method and key assumptions used in the fair value measurements of contingent consideration.

The Company recognized $ 8.8 million and $ 9.0 million contingent consideration gains during the three and six months ended June 30, 2022 , respectively .

The Company recognized a $ 0.1 million contingent consideration charge and a $ 1.0 million gain during the three and six months ended June 30, 2021 , respectively .

Nuance Biotech Co.

3 unchanged sentences

In April 2021, the Company and Nuance agreed to a mutual termination of the agreement due to the lack of a viable regulatory pathway that adequately safeguards the Company’s intellectual property against the risk of a generic product.

Dissolution costs of $ 3.0 million were included in other operating expenses in the condensed consolidated statements of operations for the three months ended March 31, 2021.

Dissolution costs of $ 3.0 million were included in other operating expenses in the condensed consolidated statements of operations for the six months ended June 30, 2021.

NOTE 16— COMMITMENTS AND CONTINGENCIES

3 unchanged sentences

In August 2020, the Company and its subsidiary, Pacira CryoTech, Inc.

Pacira BioSciences, Inc.

| Q1 2022 Form 10-Q | Page 27

of the merger agreement for the MyoScience Acquisition (the “Merger Agreement”), specifically related to the achievement of certain milestone payments under the Merger Agreement.

(“Pacira CryoTech”), filed a lawsuit in the Court of Chancery of the State of Delaware against Fortis Advisors LLC (“Fortis”), solely in its capacity as representative for the former securityholders of MyoScience, and certain other defendants, seeking declaratory judgment with respect to certain terms of the merger agreement for the MyoScience Acquisition (the “Merger Agreement”), specifically related to the achievement of certain milestone payments under the Merger Agreement.

In addition, the Company and Pacira CryoTech sought general, special and compensatory damages against the other defendants related to breach of fiduciary duties in connection with the purported achievement of milestone payments under the Merger Agreement, and breach of the Merger Agreement and certain other agreements with the defendants.

7 unchanged sentences

11,033,495 (the ’495 patent).

Pacira BioSciences, Inc.

| Q2 2022 Form 10-Q | Page 29

In November 2021, the Company filed a patent infringement suit against eVenus and its parent company in the U.S.

23 unchanged sentences

During the pendency of the lawsuit, the Company will continue to pay royalties to RDF under protest, however, the Company is unable to predict the outcome of this action at this time.

Pacira BioSciences, Inc.

| Q1 2022 Form 10-Q | Page 28

Other Commitments and Contingencies

11 unchanged sentences

The Company is working with the FDA, MAA and MHRA to finalize the regulatory pathway for its remaining pediatric commitments.

Hong Kong Pharma Tainuo Ltd.

Prior to the Flexion Acquisition, in March 2020, Flexion entered into an exclusive license agreement with Hong Kong Tainuo Pharma Ltd., or HK Tainuo, and Jiangsu Tainuo Pharmaceutical Co.

Ltd., or Jiangsu Tainuo, a subsidiary of China

Pacira BioSciences, Inc.

| Q2 2022 Form 10-Q | Page 30

Shijiazhuang Pharmaceutical Co, Ltd., for the development and commercialization of ZILRETTA in Greater China (consisting of mainland China, Hong Kong, Macau and Taiwan).

Under the terms of the agreement, HK Tainuo paid Flexion an upfront payment of $ 10.0 million during the year ended December 31, 2020 which was recorded in other liabilities as of June 30, 2022 and December 31, 2021.

The Company was also eligible to receive up to $ 32.5 million in aggregate development, regulatory and commercial sales milestone payments under the exclusive license agreement.

HK Tainuo was responsible for the clinical development, product registration and commercialization of ZILRETTA in Greater China.

The Company was 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 agreement, were to be covered by a separate supply agreement, which had not yet been finalized as of June 30, 2022.

Unless terminated earlier in accordance with its terms, the license agreement was scheduled to continue in effect in perpetuity or as long as HK Tainuo or Jiangsu Tainuo continued to sell ZILRETTA in Greater China.

Subsequently, in July 2022, the Company submitted a termination letter to HK Tainuo associated with this license agreement.

Pacira BioSciences, Inc.

| Q2 2022 Form 10-Q | Page 31

MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

7 unchanged sentences

risks associated with acquisitions, such as the risk that the businesses will not be integrated successfully, that such integration may be more difficult, time-consuming or costly than expected or that the expected benefits of the transaction will not occur;

the possibility that if we do not achieve the perceived benefits of the Flexion Acquisition (as defined below) as rapidly or to the extent anticipated by financial analysts or investors, the market price of our shares could decline;

the possibility that if we do not achieve the perceived benefits of the Flexion Acquisition as rapidly or to the extent anticipated by financial analysts or investors, the market price of our shares could decline;

the impact of the COVID-19 pandemic on elective surgeries, our manufacturing and supply chain, global and United States, or U.S., economic conditions, and our business, including our revenues, financial condition and results of operations;

24 unchanged sentences

Pacira is 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 rescue therapy only.

We are also developing innovative interventions to address debilitating conditions involving the sympathetic nervous system, such as cardiac electrical storm, chronic pain and spasticity.

Our long-acting, local analgesic EXPAREL ® (bupivacaine liposome injectable suspension) was commercially launched in April 2012.

26 unchanged sentences

For more information, see Note 4, Flexion Acquisition , to our condensed consolidated financial statements included herein.

Coronavirus (COVID-19) Pandemic

Since early 2020, our revenues have been impacted by the global pandemic caused by a novel strain of coronavirus (COVID-19) and pandemic-related challenges that included the significant postponement or suspension in the scheduling of elective surgical procedures due to public health guidance and government directives.

Coronavirus (COVID-19) Pandemic and Global Economic Conditions

Since early 2020, our revenues have been impacted by COVID-19 pandemic-related challenges that included the significant postponement or suspension in the scheduling of elective surgical procedures due to public health guidance and government directives.

Our manufacturing sites are operational and have safety protocols and

It remains unclear how long it will take the elective surgery market to normalize or if restrictions on elective procedures will recur due to future COVID-19 variants or otherwise.

Direct effects of the pandemic and global economic conditions may negatively impact our business, financial condition and results of operations.

Such impacts may include the effect of prolonged periods of inflation on our customers and suppliers and longer lead-times or the inability to

Pacira BioSciences, Inc.

| Q2 2022 Form 10-Q | Page 33

guidelines as recommended by federal, state and local governments.

secure a sufficient supply of materials.

The situation remains dynamic and subject to rapid and possibly material changes.

Additional negative impacts may also arise from the COVID-19 pandemic that we are unable to foresee.

Additional negative impacts may also arise that we are unable to foresee.

The nature and extent of such impacts will depend on future developments, which are highly uncertain and cannot be predicted.

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Recent Highlights

• In April 2022, the U.S.

Patent and Trademark Office issued Patent Nos.

11,304,904, and 11,311,486.

The ’ 904 and ’ 486 patents have an expiration date of January 22, 2041 and are listed in the FDA Approved Drug Products with Therapeutic Equivalence Evaluations (the “Orange Book”).

With these two new patents, there are currently five EXPAREL patents listed in the Orange Book each with an expiration date of January 22, 2041.

• We recently launched development plans for our second training facility in Houston, Texas.

This 19,000 square-feet state-of-the-art facility will feature an adaptive lecture hall, broadcast studio and lab space for cadaver and other interactive workshops.

Together with our Tampa facility, this second training center will play a core role in developing physician champions and community-based clinicians who want to stay on the forefront of opioid-sparing pain management.

We expect to open the Houston facility before the end of 2022 to host programs for EXPAREL, ZILRETTA and iovera°.

11,304,904, and 11,311,486 in April 2022, and issued Patent No.

11,357,727 in June 2022.

The ’904, ’486, and ’727 patents are listed in the FDA Approved Drug Products with Therapeutic Equivalence Evaluations (the “Orange Book”).

With these three new patents, there are currently six EXPAREL patents listed in the Orange Book, each with an expiration date of January 22, 2041.

• In June 2022, we announced the launch of a partnership with the National Safety Council, or NSC, and the Connect2Prevent program.

Connect2Prevent is an innovative employee-family educational program that increases awareness and prevention of opioid addiction.

The NSC created a comprehensive curriculum designed to educate employees on the risks associated with opioids and provide them with the tools to have meaningful discussions with adolescent family members.

The curriculum includes 10-12 weeks of engaging lessons on opioids, addiction, stigma, risk factors for substance use, refusal skills, harm reduction, how to talk to doctors about opioid alternatives and more.

The lessons provide easy-to-understand education, action steps and evidence-based tools to connect and communicate with teens.

• In August 2022, we announced the completion of patient enrollment in our two Phase 3 studies of EXPAREL as a nerve block in lower extremity surgeries.

The first study is evaluating EXPAREL as an adductor canal block for total knee arthroplasty, or TKA, and the second is evaluating EXPAREL as a popliteal sciatic nerve block for bunionectomy.

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

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.

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• 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 total knee arthroplasty, or TKA.

We have completed enrollment in two Phase 3 registration 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.

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• 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 a multi-center registration study to evaluate EXPAREL as a stellate ganglion block for managing electrical storm.

We are also supporting an investigator-initiated study that will evaluate iovera° as a longer-acting stellate ganglion block.

• Global expansion.

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

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-

Planning is underway for a multicenter registration study of EXPAREL as a stellate ganglion block for treating refractory cardiac ventricular dysrhythmias and for use to prevent postoperative atrial fibrillation after open heart surgery.

We are working with a steering committee of Key Opinion Leaders in regional anesthesia and

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| Q2 2022 Form 10-Q | Page 34

operative pain from small- to medium-sized surgical wounds in adults.

stellate ganglion blocks who will convene later this year to help finalize study design.

After an FDA meeting to align on our regulatory strategy for expanding the EXPAREL label to include stellate ganglion block, we expect to proceed with a registration trial.

We believe a stellate ganglion block utilizing EXPAREL will last for several days and address a significant unmet need in patients with ventricular and atrial dysrhythmias.

• Global expansion.

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

We launched EXPAREL in the U.K.

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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.

PLGA is a proven extended-release delivery vehicle that is metabolized to carbon dioxide and water as it releases drug in the intra-articular 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 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 2023 after aligning with the FDA on study design.

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

In addition, we are planning a study comparing ZILRETTA to immediate release triamcinolone acetonide in patients with Type 2 diabetes and are evaluating a repeat dosing study.

ZILRETTA Clinical Benefits

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

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iovera° Clinical Benefits

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Preliminary findings demonstrated reductions in opioids, including:

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• The daily morphine equivalent consumption in the per protocol group analysis was significantly lower at 72 hours (p<0.05), 6 weeks (p<0.05) and 12 weeks (p<0.05).

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(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.

(ii) PCRX-501, a high potency bupivacaine-pMVL for longer-lasting pain relief (20.0 mg/mL) and (iii) a bupivacaine-pMVL for intrathecal analgesia (13.3 mg/mL).

We are planning to initiate the second half of our Phase 1 study of low-concentration 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.

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 that we believe 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 build out a pipeline of innovation to improve patients’ journeys along the neural pain pathway.

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| Q2 2022 Form 10-Q | Page 38

Pacira Innovation and Training Center of Tampa

Pacira Training Facilities

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

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Results of Operations

Comparison of the Three Months Ended March 31, 2022 and 2021

Comparison of the Three and Six Months Ended June 30, 2022 and 2021

Net product sales consist of (i) EXPAREL in the U.S., the European Union, or E.U., and the United Kingdom, or U.K.;

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Three Months Ended

March 31, % Increase / (Decrease)

June 30, % Increase / (Decrease) Six Months Ended

June 30, % Increase / (Decrease)

2022 2021 2022 2021

Net product sales:

EXPAREL $ 137,007 $ 130,058 5% $ 266,212 $ 244,736 9%

ZILRETTA 23,635 — N/A

ZILRETTA 27,417 — N/A 51,052 — N/A

iovera° 3,201 3,813 (16)% 6,227 7,081 (12)%

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Royalty revenue 830 602 38% 1,399 891 57%

Collaborative licensing and milestone revenue — 125 (100)% — 125 (100)%

Total revenues $ 169,411 $ 135,590 25% $ 327,402 $ 254,617 29%

EXPAREL revenue increased 13% in the three months ended March 31, 2022 versus 2021 primarily due to increases of 11% in gross vial volume and increases of 4% in gross selling price per unit, partially offset by the sales mix of EXPAREL vial sizes.

EXPAREL revenue increased 5% and 9% in the three and six months ended June 30, 2022 versus 2021, respectively, primarily due to increases of 3.6% and 7.2% in gross vial volume and increases of 3.7% and 3.8% in gross selling price per

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| Q2 2022 Form 10-Q | Page 39

additional pandemic-related challenges in January 2022 due to regional surges in COVID-19 variant cases, staffing shortages and fatigue from care teams addressing significant procedure backlogs.

unit, partially offset by the sales mix of EXPAREL vial sizes.

Although the demand for EXPAREL has continued to increase primarily as a result of Ambulatory Surgical Centers and anesthesiologists broadening the use of long-acting EXPAREL regional approaches as a foundation of multimodal opioid-minimization strategies that enable shifting inpatient procedures to 23-hour sites of care, the elective surgery market has faced additional pandemic-related challenges due to regional surges in COVID-19 variant cases, staffing shortages and fatigue from care teams addressing significant procedure backlogs.

EXPAREL utilization remains above the overall sharp decline in elective surgical procedures relative to pre-pandemic baseline levels due to increased utilization in outpatient settings and emergent procedures.

As a result of the Flexion Acquisition, we acquired ZILRETTA in November 2021, which is an extended-release corticosteroid treatment for OA knee pain.

We recognized net product sales of $23.6 million for the three months ended March 31, 2022.

Net product sales of iovera° decreased 7% in the three months ended March 31, 2022 versus 2021 primarily due to a delay in the transition from generation 1 to generation 2 iovera° products and short-term variations in reimbursement policies in certain territories.

Bupivacaine liposome injectable suspension net product sales and its related royalties increased 96% and 97%, respectively, in the three months ended March 31, 2022 versus 2021 due to the timing of orders placed by Aratana Therapeutics, Inc.

We recognized net product sales of $27.4 million and $51.1 million for the three and six months ended June 30, 2022, respectively.

Net product sales of iovera° decreased 16% and 12% in the three and six months ended June 30, 2022 versus 2021, respectively, primarily due to a delay in the transition from generation 1 to generation 2 iovera° products and short-term variations in reimbursement policies in certain territories.

Bupivacaine liposome injectable suspension net product sales decreased and its related royalties increased nominally in the three months ended June 30, 2022 versus 2021.

Bupivacaine liposome injectable suspension net product sales and its related royalties increased in the six months ended June 30, 2022 versus 2021.

These changes versus the prior year periods were due to the timing of orders placed by Aratana Therapeutics, Inc.

for veterinary use.

Any renewed government suspension of or reluctance of patients to have elective procedures would impact our future sales of EXPAREL, ZILRETTA and iovera° during the ongoing COVID-19 pandemic.

The following tables provide a summary of activity with respect to our sales related allowances and accruals related to EXPAREL and ZILRETTA for the three months ended March 31, 2022 and 2021 (in thousands):

March 31, 2022 Returns Allowances Prompt Payment Discounts Service

The following tables provide a summary of activity with respect to our sales related allowances and accruals related to EXPAREL and ZILRETTA for the six months ended June 30, 2022 and 2021 (in thousands):

June 30, 2022 Returns Allowances Prompt Payment Discounts Service

Chargebacks Government Rebates Total

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Payments / Adjustments (2,503) (5,540) (8,876) (18,960) (740) (36,619)

Balance at March 31, 2022 $ 2,909 $ 1,225 $ 3,554 $ 4,413 $ 708 $ 12,809

March 31, 2021 Returns Allowances Prompt Payment Discounts Service

Balance at June 30, 2022 $ 1,675 $ 1,108 $ 2,883 $ 3,725 $ 775 $ 10,166

June 30, 2021 Returns Allowances Prompt Payment Discounts Service

Chargebacks Government

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Payments / Adjustments (261) (4,631) (3,846) (5,814) — (14,552)

Balance at March 31, 2021 $ 1,161 $ 1,023 $ 1,000 $ 1,744 $ — $ 4,928

Total reductions of gross product sales from sales-related allowances and accruals were $16.7 million and $7.1 million, or 9.7% and 5.7% of gross product sales, for the three months ended March 31, 2022 and 2021, respectively.

The overall increase in sales-related allowances and accruals as a percentage of gross product sales was directly related to the addition of the ZILRETTA-related allowances and accruals.

Balance at June 30, 2021 $ 1,260 $ 1,426 $ 1,128 $ 2,024 $ — $ 5,838

Total reductions of gross product sales from sales-related allowances and accruals were $34.4 million and $15.6 million, or 9.6% and 5.8% of gross product sales, for the six months ended June 30, 2022 and 2021, respectively.

The overall increase in sales-related allowances and accruals as a percentage of gross product sales was primarily related to the addition of the ZILRETTA-related allowances and accruals.

Pacira BioSciences, Inc.

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Three Months Ended

March 31, % Increase / (Decrease)

June 30, % Increase / (Decrease) Six Months Ended

June 30, % Increase / (Decrease)

2022 2021 2022 2021

Cost of goods sold $ 50,627 $ 35,248 43% $ 86,701 $ 66,597 30%

Gross margin 70 % 74 % 74 % 74 %

Gross margin increased three percentage points in the three months ended March 31, 2022 versus 2021, mainly due to lower cost of EXPAREL product sold due to higher production levels and downtime that occurred in 2021, partially offset by the ZILRETTA step-up of fixed assets and inventory to fair value in purchase accounting.

Gross margin decreased four percentage points in the three months ended June 30, 2022 versus 2021 mainly due to higher EXPAREL inventory reserves due to raw material supply chain delays and the ZILRETTA step-up of fixed assets and inventory to fair value in accordance with purchase accounting.

There was no change in gross margin in the six months ended June 30, 2022 versus 2021, when a two percentage point increase due to the prior period’s unplanned downtime was offset by a two percentage point decrease due to higher EXPAREL inventory reserves attributable to raw material supply chain delays.

Research and Development Expenses

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Three Months Ended

March 31, % Increase / (Decrease)

June 30, % Increase / (Decrease) Six Months Ended

June 30, % Increase / (Decrease)

2022 2021 2022 2021

Clinical and preclinical development $ 17,734 $ 5,111 100%+ $ 31,174 $ 13,131 100%+

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% of total revenues 16 % 9 % 15 % 11 %

Total research and development expense increased 36% in the three months ended March 31, 2022 versus 2021.

Clinical and preclinical development expense increased 68% in the three months ended March 31, 2022 versus 2021 due to the start-up of and continued enrollment in two EXPAREL lower extremity nerve block trials in bunionectomy and TKA and ongoing trials for the product candidates acquired as part of the Flexion Acquisition.

Product development and manufacturing capacity expansion expense increased 6% in the three months ended March 31, 2022 versus 2021 mainly attributable to the scale-up of our manufacturing capacity at our Science Center Campus in San Diego, California.

Regulatory and other expense decreased 16% in the three months ended March 31, 2022 versus 2021 due lower ongoing costs in the first quarter 2022 related to our iovera° clinical data registry, as compared to start-up expenses incurred in the first quarter of 2021.

Total research and development expense increased over 100% and 68% in the three and six months ended June 30, 2022 versus 2021, respectively.

Clinical and preclinical development expense increased over 100% in each of the three and six months ended June 30, 2022 versus 2021, due to the start-up of and continued enrollment in two EXPAREL lower extremity nerve block trials in bunionectomy and TKA and ongoing trials for the product candidates acquired as part of the Flexion Acquisition.

Product development and manufacturing capacity expansion expense increased 10% and 8% in the three and six months ended June 30, 2022 versus 2021, respectively, mainly attributable to the significant scale-up of our EXPAREL manufacturing capacity at our Science Center Campus in San Diego, California.

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Stock-based compensation increased 32% in the three months ended March 31, 2022 versus 2021 primarily due to greater equity awards outstanding for research and development personnel.

Regulatory and other expense increased 28% and 2% in the three and six months ended June 30, 2022 versus 2021, respectively, due to increased support of E.U.

EXPAREL pediatric submissions, partially offset by lower ongoing costs in 2022 related to our iovera° clinical data registry, as compared to start-up expenses incurred in the first half of 2021.

Stock-based compensation increased 14% and 22% in the three and six months ended June 30, 2022 versus 2021, respectively, primarily due to greater equity awards outstanding for research and development personnel.

Selling, General and Administrative Expenses

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Three Months Ended

March 31, % Increase / (Decrease)

June 30, % Increase / (Decrease) Six Months Ended

June 30, % Increase / (Decrease)

2022 2021 2022 2021

Sales and marketing $ 36,854 $ 28,259 30% $ 75,294 $ 55,361 36%

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% of total revenues 38 % 37 % 39 % 39 %

Total selling, general and administrative expenses increased 32% in the three months ended March 31, 2022 versus 2021.

Sales and marketing expenses increased 42% in the three months ended March 31, 2022 versus 2021.

Total selling, general and administrative expenses increased 28% and 30% in the three and six months ended June 30, 2022 versus 2021, respectively

Sales and marketing expenses increased 30% and 36% in the three and six months ended June 30, 2022 versus 2021, respectively.

The increases were driven by a sales force expansion supporting iovera°, the addition of a sales force to support ZILRETTA and fully staffing a contracted sales force in Europe.

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Additionally, we continue our investment in clinician training in the use of EXPAREL and iovera° at our PITT training facility in Tampa, Florida.

We expect that the addition of ZILRETTA to our commercial portfolio will increase our sales and marketing spend in 2022 as we increase the size of our ZILRETTA and iovera° sales force, which is providing clinicians with two unique OA treatment options to individualize patient care and patient reimbursement support for ZILRETTA.

General and administrative expenses increased 26% in the three months ended March 31, 2022 versus 2021 due to administrative support costs as a result of the Flexion Acquisition in November 2021, legal costs to support intellectual property protection and additional support for our expansion into European markets.

Stock-based compensation increased 11% in the three months ended March 31, 2022 and 2021 primarily due to an increase in the number of equity awards outstanding for selling, general and administrative personnel.

The addition of ZILRETTA to our commercial portfolio has increased our sales and marketing spend in 2022 as we increased the size of our ZILRETTA and iovera° sales force, which is providing clinicians with two unique OA treatment options to individualize patient care and patient reimbursement support for ZILRETTA.

General and administrative expenses increased 32% and 29% in the three and six months ended June 30, 2022 versus 2021, respectively.

The increases were driven by administrative support costs as a result of the Flexion Acquisition in November 2021, including transition expenses during integration, and additional support for our expansion into European markets.

The increase in the six months ended June 30, 2022 also includes legal costs to support intellectual property protection.

Stock-based compensation increased 11% in both the three and six months ended June 30, 2022 and 2021 primarily due to an increase in the number of equity awards outstanding for selling, general and administrative personnel.

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Amortization of Acquired Intangible Assets

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Three Months Ended

March 31, % Increase / (Decrease)

June 30, % Increase / (Decrease) Six Months Ended

June 30, % Increase / (Decrease)

2022 2021 2022 2021

Amortization of acquired intangible assets $ 14,322 $ 1,967 100% + $ 28,644 $ 3,933 100% +

Amortization of acquired intangible assets increased substantially in the three months ended March 31, 2022 versus 2021 due to the Flexion Acquisition.

Amortization of acquired intangible assets increased substantially in the three and six months ended June 30, 2022 versus 2021 due to the Flexion Acquisition.

We acquired a developed technology intangible asset for ZILRETTA for OA knee pain, which is being amortized over a useful life of approximately ten years.

For more information, see Note 4, Flexion Acquisition, and Note 8, Goodwill and Intangible Assets , to our condensed consolidated financial statements included herein.

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Acquisition-Related Charges, Product Discontinuation and Other

Acquisition-Related (Gains) Charges, Product Discontinuation and Other

The following table provides a summary of the costs related to the Flexion Acquisition, MyoScience Acquisition, termination costs and other activities during the periods indicated, including percent changes (dollar amounts in thousands):

Three Months Ended

March 31, % Increase / (Decrease)

Acquisition-related charges (gains) $ 4,337 $ (1,127) N/A

Other — 3,000 (100)%

Total acquisition-related charges, product discontinuation and other $ 4,337 $ 1,873 100% +

During the three months ended March 31, 2022, we recognized acquisition-related charges of $4.3 million.

These charges are primarily driven by severance and other employee related costs, legal and other professional fees, third-party services and other one-time charges associated with the Flexion Acquisition, which were partially offset by credits from changes in the fair value of contingent consideration related to the Flexion Acquisition and MyoScience Acquisition.

For more information, see Note 15, Acquisition-Related Charges, Product Discontinuation and Other , to our condensed consolidated financial statements included herein.

In the three months ended March 31, 2021, as part of the MyoScience Acquisition, we recognized gains in the amount of $1.1 million related to changes in the fair value of contingent consideration.

June 30, % Increase / (Decrease) Six Months Ended

June 30, % Increase / (Decrease)

2022 2021 2022 2021

Acquisition-related (gains) charges, net $ (18,058) $ 146 N/A $ (13,721) $ (981) (100)%+

Other — — N/A — 3,000 (100)%

Total acquisition-related (gains) charges, product discontinuation and other $ (18,058) $ 146 N/A $ (13,721) $ 2,019 N/A

Total acquisition-related (gains) charges, product discontinuation and other increased substantially in the three and six months ended June 30, 2022 versus 2021.

During the three and six months ended June 30, 2022, we recognized acquisition-related gains, net of $18.1 million and $13.7 million, respectively.

These gains were primarily driven by reductions in acquisition contingent consideration liabilities due to adjustments to near-term forecasts for the applicable period during which the Flexion contingent consideration may be achieved under the Merger Agreement and due to the reduced probability of meeting the MyoScience contingent consideration milestones by December 31, 2023, the expiration date for achieving the milestones .

These gains were partially offset by severance, legal fees, third-party services and other one-time charges related to the Flexion Acquisition.

For more information, see Note 10, Financial Instruments , and Note 15, Acquisition-Related Charges, Product Discontinuation and Other , to our condensed consolidated financial statements included herein.

In the three and six months ended June 30, 2021, as part of the MyoScience Acquisition, we recognized acquisition-related charges of $0.1 million and gains of $1.0 million, respectively, primarily related to changes in the fair value of contingent consideration.

See Note 10, Financial Instruments , to our condensed consolidated financial statements included herein, for information regarding the methods and key assumptions used in the fair value measurements of contingent consideration.

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to advance the development and commercialization of EXPAREL in China.

In April 2021, we agreed to a mutual termination of the agreement due to the lack of a viable regulatory pathway that adequately safeguarded our intellectual property against the risk of a generic product.

Dissolution costs of $3.0 million were included in other operating expenses in the condensed consolidated statements of operations for the three months ended March 31, 2021.

In April 2021, we agreed to a mutual termination of the agreement due to the lack of a viable regulatory pathway that adequately safeguards our intellectual property against the risk of a generic product.

Dissolution costs of $3.0 million were included in other operating expenses in the condensed consolidated statements of operations for the six months ended June 30, 2021.

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Other Income (Expense)

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Three Months Ended

March 31, % Increase / (Decrease)

June 30, % Increase / (Decrease) Six Months Ended

June 30, % Increase / (Decrease)

2022 2021 2022 2021

Interest income $ 252 $ 224 13% $ 523 639 (18)%

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Total other expense, net $ (9,228) (9,195) —% $ (19,327) (15,909) 21%

Total other expense, net increased 50% in the three months ended March 31, 2022 versus 2021 primarily due to the increase in interest expense.

The 47% increase in interest expense during the three months ended March 31, 2022 was due to the $375.0 million term loan B credit agreement (the “Term Loan”) entered into in December 2021.

Total other expense, net increased nominally and 21% in the three and six months ended June 30, 2022 versus 2021, respectively.

The 26% and 36% increase in interest expense during the three and six months ended June 30, 2022, respectively, was due to the $375.0 million term loan B credit agreement (the “Term Loan”) entered into in December 2021.

This increase was partially offset by the absence of debt discount amortization associated with our convertible notes in the current year due to adopting Accounting Standards Update, or ASU, 2020-06 in 2022, and the maturing of our 2.375% convertible senior notes due 2022, or 2022 Notes, on April 1, 2022.

For additional information regarding the adoption of ASU 2020-06, see Note 2 , Summary of Significant Accounting Policies, to our condensed consolidated financial statements herein.

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Other, net in the prior year periods included a realized loss on the sale of an equity investment in the amounts of $2.5 million and $2.6 million during the three and six months ended June 30, 2021, respectively.

Income Tax Expense

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Three Months Ended

March 31, % Increase / (Decrease)

June 30, % Increase / (Decrease) Six Months Ended

June 30, % Increase / (Decrease)

2022 2021 2022 2021

Income tax expense $ 2,131 $ 6,567 (68)% $ 2,597 $ 8,921 (71)%

Effective tax rate 10 % 26 % 9 % 23 %

For the three months ended March 31, 2022 and 2021, we recorded income tax expense of $0.5 million and $2.4 million, respectively, which represented the estimated annual effective tax rate applied to the year-to-date domestic operating results adjusted for certain discrete tax benefits related to equity compensation.

The effective tax rates were 10% and 9% for the three and six months ended June 30, 2022, respectively.

The effective tax rates were 26% and 23% for the three and six months ended June 30, 2021, respectively.

Income tax expense represents the estimated annual effective tax rate applied to the year-to-date domestic operating results adjusted for certain discrete tax items.

The effective tax rates for the three and six months ended June 30, 2022 include benefits related to stock-based compensation, a first quarter SkyePharma Holding, Inc., or Skyepharma, (now a subsidiary of Vectura Group plc), milestone payment and a fair value adjustment for Flexion contingent consideration, offset by non-deductible executive compensation costs and a valuation allowance against non-U.S.

The effective tax rates for the three and six months ended June 30, 2021 include benefits related to stock-based compensation offset by non-deductible executive compensation costs and valuation allowances recorded against deductible capital losses and non-U.S.

Liquidity and Capital Resources

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We have financed our operations primarily with the proceeds from the sale of convertible senior notes and other debt, common stock, product sales and collaborative licensing and milestone revenue.

As of March 31, 2022, we had an accumulated deficit of $157.8 million, cash and cash equivalents and short-term available-for-sale investments of $452.2 million and working capital of $361.9 million.

The COVID-19 pandemic could continue to result in a reduction of certain commercial and clinical expenditures which could offset a portion of the potential revenue declines caused by the COVID-19 pandemic.

We currently expect that our cash, short-term and long-term investments on hand will be adequate to cover any potential short-term liquidity needs, and that we would be able to access other sources of financing should the need arise.

As of June 30, 2022, we had an accumulated deficit of $138.0 million, cash and cash equivalents and short-term available-for-sale investments of $316.4 million and working capital of $393.0 million.

We expect that our cash and available-for-sale investments on hand will be adequate to cover our short-term liquidity needs, and that we would be able to access other sources of financing should the need arise.

In March 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law in response to the COVID-19 pandemic.

The CARES Act, among other things, allows for certain measures to increase liquidity for businesses such as the deferral of employer payroll taxes, a tax credit for retaining employees and other provisions.

The CARES Act, among other things, allows for certain measures to increase liquidity for businesses

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| Q2 2022 Form 10-Q | Page 44

such as the deferral of employer payroll taxes, a tax credit for retaining employees and other provisions.

We benefited from the provision to defer the payment of certain employer payroll taxes in the amount of $2.8 million for the year ended December 31, 2020 and remitted $1.4 million in December 2021.

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The following table summarizes our cash flows from operating, investing and financing activities for the periods indicated (in thousands):

Three Months Ended

Six Months Ended

Condensed Consolidated Statements of Cash Flows Data:

Net cash provided by (used in):

Net cash (used in) provided by:

Operating activities $ 60,583 $ 42,215

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Financing activities (335,242) 16,233

Net decrease in cash and cash equivalents $ (358,827) $ (33,258)

Net (decrease) increase in cash and cash equivalents $ (463,517) $ 5,817

Operating Activities

During the three months ended March 31, 2022, net cash provided by operating activities was $30.8 million, compared to $12.1 million during the three months ended March 31, 2021.

The increase of $18.7 million was primarily attributable to increased revenue from both EXPAREL and ZILRETTA coupled with realized efficiencies from the Flexion acquisition and an improved gross margin.

Pacira BioSciences, Inc.

| Q1 2022 Form 10-Q | Page 42

During the six months ended June 30, 2022, net cash provided by operating activities was $60.6 million, compared to $42.2 million during the six months ended June 30, 2021.

The increase of $18.4 million was primarily attributable to increased net product sales from both ZILRETTA, acquired as part of the Flexion Acquisition in November 2021, and EXPAREL, coupled with realized efficiencies from the acquisition of Flexion.

Investing Activities

During the three months ended March 31, 2022, net cash used in investing activities was $208.0 million, which reflected $155.6 million of short-term available-for-sale investment purchases (net of maturities), a $32.0 million contingent consideration milestone payment that had been achieved in the fourth quarter of 2021 associated with our 2007 acquisition of Pacira Pharmaceuticals, Inc.

from SkyePharma Holding, Inc.

(now a subsidiary of Vectura Group plc), purchases of equity and debt investments of $12.8 million and purchases of fixed assets of $7.7 million.

During the three months ended March 31, 2021, net cash used in investing activities was $55.7 million, which reflected $41.4 million of short-term and long-term available-for-sale investment purchases (net of maturities) and purchases of fixed assets of $13.1 million.

Major fixed asset purchases included equipment for a new EXPAREL capacity expansion at our Science Center Campus in San Diego, California, and continuing expenditures for our expanding EXPAREL manufacturing capacity in Swindon, England.

In addition, we purchased a $1.2 million convertible note.

During the six months ended June 30, 2022, net cash used in investing activities was $188.9 million, which reflected $124.7 million of short-term available-for-sale investment purchases (net of maturities), a $32.0 million contingent consideration milestone payment that had been achieved in the fourth quarter of 2021 associated with our 2007 acquisition of Pacira Pharmaceuticals, Inc.

from Skyepharma, purchases of fixed assets of $19.4 million for fill lines for our products and equipment for a 200-liter EXPAREL capacity expansion project at our Science Center Campus in San Diego, California and purchases of equity and debt investments of $12.8 million.

During the six months ended June 30, 2021, net cash used in investing activities was $52.6 million, which reflected $23.8 million of short-term and long-term investment purchases (net of maturities) and purchases of fixed assets of $23.6 million.

Major fixed asset purchases included equipment for a new 200-liter EXPAREL capacity expansion project at our Science Center Campus in San Diego, California, and continuing expenditures for our expanding EXPAREL manufacturing capacity in Swindon, England.

In addition, we made a $10.0 million equity investment and also purchased a total of $4.2 million in convertible notes.

We also sold one of our equity investments for net cash proceeds of $9.1 million.

Financing Activities

During the three months ended March 31, 2022, net cash used in financing activities was $181.6 million, which primarily consisted of a $192.6 million principal repayment of the 3.375% convertible senior notes due 2024 (the “Flexion 2024 Notes” and, together with the 2025 Notes (as defined below), the “Notes”) as part of a repurchase offer to the holders of the Flexion 2024 Notes that was triggered by the Flexion Acquisition, partially offset by proceeds from the exercise of stock options of $11.0 million.

During the three months ended March 31, 2021, net cash provided by financing activities was $10.3 million, which consisted entirely of proceeds from the exercise of stock options.

During the six months ended June 30, 2022, net cash used in financing activities was $335.2 million, which primarily consisted of a $192.6 million principal repayment of the 3.375% convertible senior notes due 2024 (the “Flexion 2024 Notes”) as part of a repurchase offer to the holders of the Flexion 2024 Notes that was triggered by the Flexion Acquisition, $157.0 million to settle the 2022 Notes that matured on April 1, 2022 and a $9.4 million scheduled repayment of Term Loan principal, partially offset by $21.9 million of proceeds from the exercise of stock options and $1.8 million from the issuance of common stock through our ESPP.

During the six months ended June 30, 2021, net cash provided by financing activities was $16.2 million, which consisted of proceeds from the exercise of stock options of $16.0 million and $1.6 million from the issuance of common stock through our ESPP, partially offset by the $1.3 million financing component of the $7.0 million contingent consideration payment made to MyoScience securityholders.

Pacira BioSciences, Inc.

| Q2 2022 Form 10-Q | Page 45

2026 Term Loan B Facility

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The Credit Agreement also contains customary affirmative and negative covenants, financial covenants, representations and warranties, events of default and other provisions.

As of March 31, 2022, we were in compliance with all financial covenants under the Credit Agreement.

At March 31, 2022, we had $375.0 million in outstanding borrowings under the Term Loan.

As of June 30, 2022, we were in compliance with all financial covenants under the Credit Agreement.

During the six months ended June 30, 2022, we made a scheduled principal payment of $9.4 million.

At June 30, 2022, we had $365.6 million in outstanding borrowings under the Term Loan.

As a result of our entry into the Term Loan, we expect our interest expense to increase in 2022.

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The 2025 Notes mature on August 1, 2025.

At March 31, 2022, the outstanding principal on the 2025 Notes was $402.5 million.

At June 30, 2022, the outstanding principal on the 2025 Notes was $402.5 million.

See Note 9, Debt , to our condensed consolidated financial statements included herein for further discussion.

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In January 2022, we repurchased $192.6 million aggregate principal amount of the Flexion 2024 Notes.

At March 31, 2022, the outstanding principal on the Flexion

Pacira BioSciences, Inc.

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2024 Notes was $8.6 million.

At June 30, 2022, the outstanding principal on the Flexion 2024 Notes was $8.6 million.

See Note 9, Debt , to our condensed consolidated financial statements included herein for further discussion.

2022 Convertible Senior Notes

In March 2017, we completed a private placement of $345.0 million in aggregate principal amount of 2.375% convertible senior notes due 2022, or 2022 Notes.

The 2022 Notes accrued interest at a fixed rate of 2.375% per year, payable semiannually in arrears on April 1 st and October 1 st of each year.

In July 2020, we used part of the net proceeds from the issuance of the 2025 Notes to repurchase $185.0 million aggregate principal amount of the 2022 Notes in privately-negotiated transactions.

The 2022 Notes matured on April 1, 2022, and we settled the remaining outstanding principal balance of $160.0 million and a conversion premium of $4.8 million through a cash payment of $156.9 million and the issuance of 101,521 shares of our common stock.

For more information, see Note 9, Debt , to our condensed consolidated financial statements included herein for further discussion.

Future Capital Requirements

We believe that our existing cash and cash equivalents, available-for-sale investments and cash received from product sales will be sufficient to enable us to fund our operating expenses, capital expenditure requirements and payment of the interest and principal on our Term Loan and our Notes, and any conversions of our Notes through the next 12 months.

We believe that our existing cash and cash equivalents, available-for-sale investments and cash received from product sales will be sufficient to enable us to fund our operating expenses, capital expenditure requirements and payment of the interest and principal on our Term Loan and our convertible notes, and any conversions of our Notes through the next 12 months.

Our future use of operating cash and capital requirements will depend on many forward-looking factors, including, but not limited to, the following:

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(See Note 4, Flexion Acquisition , to our condensed consolidated financial statements included herein for more information);

• the impact of the COVID-19 pandemic, including the amounts and delays of suspended elective surgical procedures, clinical trials, longer lead-times for or the inability to secure a sufficient supply of materials due to the prioritization by certain suppliers for COVID-19 vaccine manufacturing and general economic conditions;

• the timing of and extent to which the holders of our Notes elect to convert their Notes and the timing of principal and interest payments on our Term Loan;

• the impact of the COVID-19 pandemic and global economic conditions, including the amounts and delays of suspended elective surgical procedures, clinical trials, longer lead-times for or the inability to secure a sufficient supply of materials;

• the timing of and extent to which the holders of our convertible senior notes elect to convert their notes and the timing of principal and interest payments on our Term Loan;

Pacira BioSciences, Inc.

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• the timing and impact of increases to the variable interest rate on our Term Loan borrowings in accordance with the terms of the Credit Agreement;

• the costs and our ability to successfully continue to expand the commercialization of EXPAREL, ZILRETTA and iovera°, including outside of the U.S.;

• the cost and timing of expanding and maintaining our manufacturing facilities, including the current EXPAREL capacity expansion project at our Science Center Campus in San Diego, California and a ZILRETTA capacity expansion project at the Thermo Fisher site in Swindon, England;

• the cost and timing of expanding and maintaining our manufacturing facilities, including the current EXPAREL capacity expansion project at our Science Center Campus in San Diego, California and a ZILRETTA capital project at the Thermo Fisher site in Swindon, England;

• the cost and timing of potential remaining milestone payments to MyoScience security holders, which could be up to an aggregate of $43.0 million if certain regulatory and commercial milestones are met (See Note 10, Financial Instruments , to our condensed consolidated financial statements included herein for more information);

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• the costs related to legal and regulatory issues;

• the impact of inflation on our product costs, operating expenses and business strategy;

• the costs of performing additional clinical trials for our products, including the additional pediatric trials required by the FDA and EMA as a condition of approval of EXPAREL;

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We have no committed external sources of funds, and additional equity or debt financing may not be available on acceptable terms, if at all.

Pacira BioSciences, Inc.

| Q1 2022 Form 10-Q | Page 44

In particular, capital market disruptions or negative economic conditions, especially in light of the COVID-19 pandemic, may hinder our access to capital.

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For more information on our contractual obligations and commercial commitments, see Part II, Item 7 in our Annual Report on Form 10-K for the year ended December 31, 2021 .

Pacira BioSciences, Inc.

| Q2 2022 Form 10-Q | Page 47

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-Q

Item 1. Financial Statements