What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-05-03 compared with 2022-11-03 · 483 added, 777 removed, 769 unchanged (62% of the section changed)

3 unchanged sentences

(In thousands, except share and per share amounts)

September 30,

2023 December 31,

19 unchanged sentences

Lease liabilities 8,951 9,121

Convertible senior notes, net — 350,466

Current portion of long-term debt, net 10,853 33,648

Income taxes payable — 429

Total current liabilities 98,698 147,774

9 unchanged sentences

5,000,000 shares authorized;

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

none issued and outstanding at March 31, 2023 and December 31, 2022

Common stock, par value $ 0.001 ;

250,000,000 shares authorized;

45,864,319 and 44,734,308 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

45,970,340 and 45,927,790 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively

Additional paid-in capital 936,419 924,095

Accumulated deficit ( 168,287 ) ( 148,751 )

Accumulated other comprehensive (loss) income ( 670 ) 167

Accumulated other comprehensive loss ( 137 ) ( 380 )

Total stockholders’ equity 768,041 775,010

7 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Net product sales $ 159,431 $ 157,422

Royalty revenue 910 569

Collaborative licensing and milestone revenue — — — 125

Total revenues 160,341 157,991

6 unchanged sentences

Total operating expenses 163,432 140,598

Income from operations 21,289 31,433 69,917 85,713

(Loss) income from operations ( 3,091 ) 17,393

Other (expense) income:

1 unchanged sentence

Interest expense ( 9,589 ) ( 10,246 )

Loss on early extinguishment of debt ( 16,926 ) —

Other, net ( 10 ) ( 124 )

Total other expense, net ( 23,383 ) ( 10,099 )

Income before income taxes 2,069 24,231 31,370 62,602

Income tax expense ( 2,762 ) ( 6,571 ) ( 5,359 ) ( 15,492 )

(Loss) income before income taxes ( 26,474 ) 7,294

Income tax benefit (expense) 6,938 ( 466 )

Net (loss) income $ ( 19,536 ) $ 6,828

12 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Net (loss) income $ ( 19,536 ) $ 6,828

Other comprehensive (loss) income:

Net unrealized loss on investments, net of tax ( 163 ) ( 30 ) ( 1,056 ) ( 168 )

Other comprehensive income (loss):

Net unrealized gain (loss) on investments, net of tax 251 ( 733 )

Foreign currency translation adjustments ( 8 ) 39

Total other comprehensive loss ( 65 ) ( 28 ) ( 837 ) ( 165 )

Total other comprehensive income (loss) 243 ( 694 )

Comprehensive (loss) income $ ( 19,293 ) $ 6,134

4 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

(In thousands)

Common Stock Additional

Capital Accumulated

Deficit Accumulated Other Comprehensive (Loss) Income

Shares Amount Total

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

Exercise of stock options 37 — 1,563 — — 1,563

Vested restricted stock units 25 — — — — —

Stock-based compensation — — 12,682 — — 12,682

Other comprehensive loss (Note 11) — — — — ( 65 ) ( 65 )

Net loss — — — ( 693 ) — ( 693 )

Balance at September 30, 2022 45,864 $ 46 $ 909,396 $ ( 138,649 ) $ ( 670 ) $ 770,123

Common Stock Additional

Capital Accumulated

Deficit Accumulated Other Comprehensive (Loss) Income

Shares Amount Total

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

Exercise of stock options 74 1 3,017 — — 3,018

Vested restricted stock units 12 — — — — —

Stock-based compensation — — 10,784 — — 10,784

Other comprehensive loss (Note 11) — — — — ( 28 ) ( 28 )

Net income — — — 17,660 — 17,660

Balance at September 30, 2021 44,523 $ 45 $ 925,169 $ ( 206,765 ) $ 153 $ 718,602

See accompanying notes to condensed consolidated financial statements.

Pacira BioSciences, Inc.

| Q3 2022 Form 10-Q | Page 7

PACIRA BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

(In thousands)

1 unchanged sentence

Capital Accumulated

Deficit Accumulated Other Comprehensive (Loss) Income

Deficit Accumulated Other Comprehensive Loss

Shares Amount Total

Balance at December 31, 2022 45,928 $ 46 $ 924,095 $ ( 148,751 ) $ ( 380 ) $ 775,010

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 12 — 334 — — 334

Vested restricted stock units 30 — — — — —

Common stock issued under employee stock

purchase plan 37 — 1,821 — — 1,821

Stock-based compensation — — 11,990 — — 11,990

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

Other comprehensive loss (Note 11) — — — — ( 837 ) ( 837 )

Net income — — — 26,011 — 26,011

Balance at September 30, 2022 45,864 $ 46 $ 909,396 $ ( 138,649 ) $ ( 670 ) $ 770,123

Other comprehensive income (Note 10) — — — — 243 243

Net loss — — — ( 19,536 ) — ( 19,536 )

Balance at March 31, 2023 45,970 $ 46 $ 936,419 $ ( 168,287 ) $ ( 137 ) $ 768,041

Common Stock Additional

3 unchanged sentences

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 (1)

— — ( 96,468 ) 47,235 — ( 49,233 )

Exercise of stock options 323 — 11,078 — — 11,078

Vested restricted stock units 7 — — — — —

Common stock issued under employee stock

purchase plan 31 — 1,574 — — 1,574

Stock-based compensation — — 11,189 — — 11,189

1 unchanged sentence

Net income — — — 6,828 — 6,828

Balance at September 30, 2021 44,523 $ 45 $ 925,169 $ ( 206,765 ) $ 153 $ 718,602

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

(1) Effective January 1, 2022, the Company adopted Accounting Standards Update 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) on a modified retrospective method of transition.

As a result, the Company no longer separately presents in equity an embedded conversion feature for its convertible debt.

See accompanying notes to condensed consolidated financial statements.

4 unchanged sentences

(In thousands)

Nine Months Ended

September 30,

Three Months Ended

Operating activities:

Net income $ 26,011 $ 47,110

Adjustments to reconcile net income to net cash provided by operating activities:

Net (loss) income $ ( 19,536 ) $ 6,828

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Deferred taxes ( 7,342 ) 29

2 unchanged sentences

Amortization of debt discount 675 706

Loss (gain) on disposal of fixed assets 193 ( 10 )

Loss on early extinguishment of debt 16,926 —

Loss on disposal of fixed assets — 9

Stock-based compensation 11,990 11,189

Changes in contingent consideration 11,618 ( 1,071 )

Impairment of investment 10,000 —

Loss on investment 184 2,641

(Gain) loss on investment ( 23 ) 18

Changes in operating assets and liabilities:

5 unchanged sentences

Other liabilities 421 70

Payment of contingent consideration — ( 5,662 )

Net cash provided by operating activities 19,128 30,777

5 unchanged sentences

Purchases of equity and debt investments ( 4,000 ) ( 12,750 )

Sale of equity investment — 9,057

Net cash used in investing activities ( 236,374 ) ( 87,708 )

Net cash provided by (used in) investing activities 66,183 ( 208,019 )

Financing activities:

Proceeds from exercises of stock options 333 11,024

Proceeds from shares issued under employee stock purchase plan 1,820 1,574

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

Proceeds from Term loan A facility 149,550 —

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

Repayment of Term loan B facility maturing December 2026 ( 18,750 ) —

Payment of contingent consideration to MyoScience, Inc.

securityholders — ( 1,338 )

Net cash (used in) provided by financing activities ( 343,017 ) 19,285

Net (decrease) increase in cash and cash equivalents ( 476,154 ) 34,079

Repayment of Term loan B facility ( 296,875 ) —

Debt extinguishment costs ( 5,750 ) —

Payment of debt issuance and financing costs ( 1,163 ) —

Net cash used in financing activities ( 153,905 ) ( 181,585 )

Net decrease in cash and cash equivalents ( 68,594 ) ( 358,827 )

Cash and cash equivalents, beginning of period 104,139 585,578

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 $ 2,252 $ 6,244

8 unchanged sentences

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.

in November 2021.

EXPAREL utilizes the Company’s proprietary multivesicular liposome drug delivery technology that encapsulates drugs without altering their molecular structure, and releases them over a desired period of time.

In November 2021, the Company acquired Flexion Therapeutics, Inc., or Flexion, and added ZILRETTA ® (triamcinolone acetonide extended-release injectable suspension) to its product portfolio.

EXPAREL utilizes the Company’s proprietary multivesicular liposome (pMVL) drug delivery technology that encapsulates drugs without altering their molecular structure, and releases them over a desired period of time.

In November 2021, the Company acquired Flexion Therapeutics, Inc., or Flexion (the “Flexion Acquisition”), and added ZILRETTA ® (triamcinolone acetonide extended-release injectable suspension) to its product portfolio.

ZILRETTA is the first and only extended-release, intra-articular (meaning in the joint) injection indicated for the management of osteoarthritis, or OA, knee pain.

For more information, see Note 4, Flexion Acquisition .

In April 2019, the Company added iovera° ® to its commercial offering with the acquisition of MyoScience, Inc., or MyoScience (the “MyoScience Acquisition”).

2 unchanged sentences

The Company is managed and operated as a single business focused on the development, manufacture, marketing, distribution and sale of non-opioid pain management and regenerative health solutions.

The Company is managed by a single management team, and consistent with its organizational structure, the Chief Executive Officer and Chairman manages and allocates resources at a consolidated level.

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 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.

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 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.

The Company is managed by a single management team, and, consistent with its organizational structure, the Chief Executive Officer—who is the Company’s chief operating decision maker—manages and allocates resources at a consolidated level.

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

NOTE 2— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 unchanged sentences

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, 2022 .

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

Pacira BioSciences, Inc.

| Q3 2022 Form 10-Q | Page 10

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

The condensed consolidated financial statements at March 31, 2023, and for the three-month periods ended March 31, 2023 and 2022, 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.

The condensed consolidated balance sheet at December 31, 2022 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, 2022.

3 unchanged sentences

The results of operations for these interim periods are not necessarily indicative of results that may be expected for any other interim periods or for the full year.

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 9

Concentration of Major Customers

4 unchanged sentences

The Company also contracts directly with healthcare providers and intermediaries such as Group Purchasing Organizations, or GPOs.

The Company sells iovera° directly to end users and its bupivacaine liposome injectable suspension for veterinary use to a third-party licensee in the U.S.

The Company sells its bupivacaine liposome injectable suspension for veterinary use to a third-party licensee in the U.S.

and sells iovera° directly to end users.

The table below includes the percentage of revenues comprised by the Company’s three largest wholesalers in each period presented:

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Largest wholesaler 32 % 31 %

2 unchanged sentences

Total 79 % 76 %

The percentage of revenues from the Company’s three largest wholesalers have shifted in the current year with the addition of ZILRETTA sales, which began in November 2021 following the completion of the Flexion Acquisition (as defined below).

Recently Adopted Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40), which limits the number of convertible instruments that require separate accounting to (i) those with embedded conversion features that are not clearly and closely related to the debt, that meet the definition of a derivative and that do not qualify for the scope exception from derivative accounting and (ii) convertible debt instruments issued with substantial premiums for which the premiums were recorded as paid in capital.

In addition, the new guidance requires diluted earnings per share calculations be prepared using the if-converted method instead of the treasury stock method.

The Company elected to adopt the new guidance using a modified retrospective method of transition, which applied to transactions outstanding at January 1, 2022.

As a result, the Company does not separately present in equity an embedded conversion feature for its convertible debt.

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

Pacira BioSciences, Inc.

| Q3 2022 Form 10-Q | Page 11

NOTE 3— REVENUE

3 unchanged sentences

(iii) iovera° in the U.S., Canada and the E.U.

and (iv) sales of, and royalties on, its bupivacaine liposome injectable suspension for veterinary use.

and (iv) sales of, and royalties on, its bupivacaine liposome injectable suspension primarily for veterinary use.

Royalty revenues are from the Company’s collaborative licensing agreements.

The Company does not consider revenue from sources other than sales of EXPAREL and ZILRETTA to be material sources of its consolidated revenue.

As such, the following disclosure only relates to revenue associated with net EXPAREL and ZILRETTA product sales.

As such, the following disclosure is limited to revenue associated with net product sales of EXPAREL and ZILRETTA.

Net Product Sales

9 unchanged sentences

The Company includes these estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized for such transaction will not occur, or when the uncertainty associated with the variable consideration is resolved.

The calculation of some of these items requires management to make estimates based on sales data, historical return data, contracts, statutory requirements and other related information that may become known in the future.

Chargebacks for fees and discounts to qualified government healthcare providers represent the estimated obligations resulting from contractual commitments to sell products to qualified Department of Veteran Affairs hospitals and 340B entities at prices lower than the list prices charged to other customers.

The 340B Drug Discount Program is a U.S.

federal government program that requires participating drug manufacturers to provide outpatient drugs to eligible health care organizations and covered entities at reduced prices.

Customers charge the Company for the difference between the product payment and the statutory selling price to the qualified entity.

Reserves are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and trade receivables, net.

Chargeback amounts are generally determined at the time of sale to the qualified government healthcare provider by customers, and the Company generally issues credits for such

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 10

amounts within weeks of the customer’s notification to the Company of the sale.

Reserves for chargebacks consist of credits that the Company expects to issue for units that the Company expects will be sold to qualified healthcare providers, and chargebacks that customers have claimed, but for which the Company has not yet issued a credit.

The calculation for some of these items requires management to make estimates based on sales data, historical return data, contracts, statutory requirements and other related information that may become known in the future.

The adequacy of these provisions is reviewed on a quarterly basis.

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 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.

The majority of accounts receivable arise from product sales and represent amounts due from wholesalers, hospitals, ambulatory surgery centers, specialty distributors, a specialty pharmacy and individual physicians.

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

Performance Obligations

6 unchanged sentences

The Company considers control to have transferred upon delivery because the customer has legal title to the asset, physical possession of the asset has been transferred, the customer has significant risks and rewards of ownership of the asset and the Company has a present right to payment at that time.

Pacira BioSciences, Inc.

| Q3 2022 Form 10-Q | Page 12

Disaggregated Revenue

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Net product sales:

4 unchanged sentences

Total net product sales $ 159,431 $ 157,422

NOTE 4— FLEXION ACQUISITION

On November 19, 2021, the Company acquired Flexion (the “Flexion Acquisition”), a biopharmaceutical company focused on the discovery, development, and commercialization of novel, local therapies for the treatment of patients with musculoskeletal conditions, beginning with osteoarthritis, the most common form of arthritis.

Upon consummation of the Flexion Acquisition, Flexion became a wholly-owned subsidiary of the Company and was renamed Pacira Therapeutics, Inc.

The total consideration for the Flexion Acquisition was approximately $ 578.8 million consisting of:

(i) $ 448.5 million of cash paid to former Flexion stockholders and to settle restricted stock units and in-the-money stock options;

(ii) an $ 85.1 million cash payment to repay Flexion debt that was not assumed by the Company and (iii) $ 45.2 million of estimated contingent consideration related to contingent value rights, or CVRs, that were issued to Flexion shareholders and certain equity award holders in conjunction with the Flexion Acquisition.

The consideration is subject to adjustments based on the achievement of certain potential milestone payments.

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 nine months ended September 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.

| Q3 2022 Form 10-Q | Page 13

The Company is finalizing its valuation of certain tax accounts, and anticipates finalizing the purchase price allocation as the information necessary to complete the analyses 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):

Amounts Recognized at the Acquisition Date

(as previously

reported) (a)

Measurement Period Adjustments (b)

Amounts Recognized at the Acquisition Date

(as adjusted)

ASSETS ACQUIRED

Cash and cash equivalents $ 113,562 $ — $ 113,562

Short-term available-for-sale investments 11,153 — 11,153

Accounts receivable 32,838 — 32,838

Inventories 29,667 — 29,667

Prepaid expenses and other assets 4,852 — 4,852

Fixed assets 23,307 — 23,307

Deferred tax assets 58,015 ( 10,970 ) 47,045

Right-of-use assets 6,585 — 6,585

Identifiable intangible assets 480,000 — 480,000

In-process research and development (IPR&D) 61,000 — 61,000

Total assets $ 820,979 $ ( 10,970 ) $ 810,009

LIABILITIES ASSUMED

Accounts payable $ 9,794 $ — $ 9,794

Accrued expenses 22,746 1,216 23,962

Deferred revenue 10,000 — 10,000

Lease liabilities 6,585 — 6,585

Other liabilities 1,187 — 1,187

Long-term debt 201,450 — 201,450

Total liabilities 251,762 1,216 252,978

Total identifiable net assets acquired 569,217 ( 12,186 ) 557,031

Goodwill 9,628 12,186 21,814

Total consideration transferred $ 578,845 $ — $ 578,845

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

(b) Represents the finalization of a tax study and 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 and nine-month periods ended September 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

September 30, 2021 Nine Months Ended

September 30, 2021

Total revenues $ 149,048 $ 456,429

Net loss $ ( 10,763 ) $ ( 31,250 )

Pro forma basic and diluted net loss per share $ ( 0.24 ) $ ( 0.71 )

Pacira BioSciences, Inc.

| Q3 2022 Form 10-Q | Page 14

The unaudited pro forma financial information was prepared using the acquisition method of accounting and was based on the historical financial information of the Company and Flexion.

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 and nine months ended September 30, 2021;

• Removal of Flexion’s interest expense and associated deferred financing cost amortization related to the $ 85.1 million of debt not assumed;

• Adjustments to the Company’s interest income for the cash used to acquire Flexion;

• Additional cost of goods sold related to a step-up value in inventory;

• Additional amortization expense from the acquired developed technology intangible assets;

• Additional depreciation of Flexion’s fixed assets;

• Additional lease expense on Flexion’s right-of-use, or ROU, assets.

In addition, all of the above adjustments were adjusted for the applicable tax impact.

NOTE 4— INVENTORIES

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

September 30, December 31,

March 31, December 31,

Raw materials $ 44,212 $ 39,810

2 unchanged sentences

Total $ 92,977 $ 96,063

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 11

NOTE 5— FIXED ASSETS

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

September 30, December 31,

March 31, December 31,

Machinery and equipment $ 120,082 $ 118,684

6 unchanged sentences

Fixed assets, net $ 181,617 $ 183,512

For the three months ended September 30, 2022 and 2021, depreciation expense was $ 5.8 million and $ 3.8 million, respectively.

For the three months ended September 30, 2022 and 2021, there was $ 1.1 million and $ 0.9 million of capitalized interest on the construction of manufacturing sites, respectively.

For the nine months ended September 30, 2022 and 2021, depreciation expense was $ 18.0 million and $ 9.6 million, respectively.

For the nine months ended September 30, 2022 and 2021, there was $ 2.9 million and $ 3.0 million of capitalized interest on the construction of manufacturing sites, respectively.

At September 30, 2022 and December 31, 2021, total fixed assets, net includes leasehold improvements and manufacturing process equipment located in Europe in the amount of $ 57.4 million and $ 65.4 million, respectively.

As of September 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.

| Q3 2022 Form 10-Q | Page 15

For the three months ended March 31, 2023 and 2022, depreciation expense was $ 5.3 million and $ 5.7 million, respectively.

For the three months ended March 31, 2023 and 2022, there was $ 1.4 million and $ 0.8 million of capitalized interest on the construction of manufacturing sites, respectively.

At March 31, 2023 and December 31, 2022, total fixed assets, net includes manufacturing process equipment and leasehold improvements located in Europe in the amount of $ 42.7 million and $ 44.7 million, respectively.

As of March 31, 2023 and December 31, 2022, the Company had asset retirement obligations of $ 3.4 million and $ 3.3 million, respectively, included in accrued expenses and other liabilities on its condensed consolidated balance sheets, for costs associated with returning leased spaces to their original condition upon the termination of certain of its lease agreements.

NOTE 6— LEASES

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 7.9 years, some of which provide renewal options at the then-current market value.

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

The Company also has two embedded leases with Thermo Fisher Scientific Pharma Services for the use of their manufacturing facility in Swindon, England for the production of EXPAREL and ZILRETTA.

A portion of the associated monthly base fees has been allocated to the lease components based on a relative fair value basis.

During the three months ended September 30, 2022, the Company entered into a partial sublease for the former Flexion research and development laboratory in Woburn, Massachusetts which resulted in a $ 0.4 million ROU asset reclassified to a fixed asset.

The operating lease costs for the facilities include lease and non-lease components, such as common area maintenance and other common operating expenses, along with executory costs such as insurance and real estate taxes.

Total operating lease expense, net is as follows (in thousands):

Three Months Ended Nine Months Ended

September 30, September 30,

2022 2021 2022 2021

Three Months Ended

Fixed lease costs $ 3,628 $ 3,527

1 unchanged sentence

Sublease income ( 153 ) —

Lease expense, net of sublease income $ 3,811 $ 3,335 $ 11,860 $ 10,080

Total $ 4,042 $ 3,999

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

Nine Months Ended

September 30,

Cash paid for operating lease liabilities, net of lease incentive $ 9,922 $ 9,868

ROU assets recorded in exchange for lease obligations $ — $ 212

The Company has elected to net the amortization of the ROU asset and the reduction of the lease liability principal in other liabilities in the condensed consolidated statement of cash flows.

Three Months Ended

Cash paid for operating lease liabilities, net of lease incentives $ 3,763 $ 3,279

Right-of-use assets recorded in exchange for lease obligations $ — $ 16

The Company has elected to net the amortization of the right-of-use asset and the reduction of the lease liability principal in other liabilities in the condensed consolidated statements of cash flows.

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 12

The Company has measured its operating lease liabilities at an estimated discount rate at which it could borrow on a collateralized basis over the remaining term for each operating lease.

The weighted average remaining lease term and the weighted average discount rate are summarized as follows:

September 30,

The weighted average remaining lease terms and the weighted average discount rates are summarized as follows:

Weighted average remaining lease term 6.61 years 7.55 years

1 unchanged sentence

Maturities of the Company’s operating lease liabilities are as follows (in thousands):

Year Aggregate Minimum Payments Due

2022 (remaining three months) $ 3,261

Year Aggregate Minimum

2023 (remaining nine months) $ 10,263

Thereafter 27,350

2 unchanged sentences

Total operating lease liabilities $ 71,393

Pacira BioSciences, Inc.

| Q3 2022 Form 10-Q | Page 16

As of September 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 three months) $ 81

Thereafter 443

Total future lease payments $ 2,517

NOTE 7— GOODWILL AND INTANGIBLE ASSETS

The Company’s goodwill results from the acquisition of Pacira Pharmaceuticals, Inc.

(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 September 30, 2022 and December 31, 2021 were $ 157.4 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.

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

The balance at each of March 31, 2023 and December 31, 2022 was $ 163.2 million.

The Skyepharma Acquisition occurred in March 2007, prior to the requirements to record contingent consideration at fair value under ASC 805-30.

1 unchanged sentence

The final Skyepharma milestone payment of $ 32.0 million when annual net sales collected reached $ 500.0 million was achieved in the fourth quarter of 2021 and paid during the first quarter of 2022.

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 13

Intangible Assets

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):

September 30, 2022 Gross Carrying Value Accumulated

Intangible assets, net, consists 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, 2023 Gross Carrying Value Accumulated

Amortization Intangible

13 unchanged sentences

Total intangible assets, net $ 624,956 $ ( 84,410 ) $ 540,546

Amortization expense on intangible assets for the three and nine months ended September 30, 2022 was $ 14.3 million and $ 43.0 million, respectively.

Amortization expense on intangible assets for the three and nine months ended September 30, 2021 was $ 2.0 million and $ 5.9 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.

Pacira BioSciences, Inc.

| Q3 2022 Form 10-Q | Page 17

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 $ 14.3 million for the remaining three 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.

During the three months ended June 30, 2022, 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.

Amortization expense on intangible assets was $ 14.3 million for both the three months ended March 31, 2023 and 2022.

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 2023, $ 57.3 million each year from 2024 to 2030, $ 37.4 million in 2031, $ 7.9 million in 2032 and $ 2.2 million in 2033.

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

September 30, December 31,

March 31, December 31,

Term loan A facility maturing March 2028 $ 148,387 $ —

Term loan B facility maturing December 2026 (1)

2 unchanged sentences

3.375 % Convertible senior notes due May 2024

8,641 201,249

2.375 % Convertible senior notes due April 2022 (1)

Total $ 553,771 $ 689,471

(1) The 2022 Notes (as defined below) matured on April 1, 2022.

Term Loan B Facility

In December 2021, the Company entered into a term loan credit agreement (the “Credit Agreement”) with JP Morgan Chase Bank, N.A., as administrative agent and the initial lender.

The term loan issued under the Credit Agreement (the “Term Loan”) was issued at a 3 % discount and allows for a single-advance term loan B facility in the principal amount of $ 375.0 million, which is secured by substantially all of the Company’s and each subsidiary guarantor’s assets.

(1) The TLB Term Loan (as defined below) was refinanced on March 31, 2023 as discussed below.

Term Loan A Facility

On March 31, 2023, the Company entered into a credit agreement (the “TLA Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent, and certain lenders, to refinance the indebtedness outstanding under the Company’s TLB Credit Agreement (as defined and discussed below).

The term loan issued under the TLA Credit Agreement (the “TLA Term Loan”) was issued at a 0.30 % discount and provides for a single-advance term loan A facility in the principal amount of $ 150.0 million, which is secured by substantially all of the Company’s and any subsidiary guarantor’s assets.

Subject to certain conditions, the Company may, at any time, on one or more occasion, add one or more new classes of term facilities and/or increase the principal amount of the loans of any existing class by requesting one or more incremental term facilities.

The net proceeds of the Term Loan were approximately $ 363.8 million after deducting an original issue discount of $ 11.2 million.

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

September 30, December 31,

The net proceeds of the TLA Term Loan were approximately $ 149.6 million after deducting an original issue discount of $ 0.4 million.

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 14

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

Term Loan maturing March 2028 $ 150,000

Deferred financing costs ( 1,163 )

Discount on debt ( 450 )

Total debt, net of debt discount and deferred financing costs $ 148,387

The TLA Term Loan matures on March 31, 2028 and requires quarterly repayments of principal in the amount of $ 2.8 million commencing June 30, 2023, increasing to $ 3.8 million commencing March 31, 2025, with a remaining balloon payment of approximately $ 85.3 million due at maturity.

During the remainder of 2023, the Company will be required to make three quarterly principal payments totaling $ 8.4 million.

The TLA Credit Agreement requires the Company to, among other things, maintain (i) a Senior Secured Net Leverage Ratio (as defined in the TLA Credit Agreement), determined as of the last day of each fiscal quarter, of no greater than 3.00 to 1.00 and (ii) a Fixed Charge Coverage Ratio (as defined in the Credit Agreement), determined as of the last day of each fiscal quarter, of no less than 1.50 to 1.00.

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

As of March 31, 2023, the Company was in compliance with all financial covenants under the TLA Credit Agreement.

The Company may elect to borrow either (i) alternate base rate borrowings or (ii) term benchmark borrowings or daily simple SOFR (as defined in the TLA Credit Agreement) borrowings.

Each term loan borrowing that is an alternate base rate borrowing bears interest at a rate per annum equal to (i) the Alternate Base Rate (as defined in the TLA Credit Agreement), plus (ii) a spread based on the Company’s Senior Secured Net Leverage Ratio ranging from 2.00 % to 2.75 %.

Each term loan borrowing that is a term benchmark borrowing or daily simple SOFR borrowing bears interest at a rate per annum equal to (i) the Adjusted Term SOFR Rate or Adjusted Daily Simple SOFR (as each is defined in the Credit Agreement), plus (ii) a spread based on the Company’s Senior Secured Net Leverage Ratio ranging from 3.00 % to 3.75 %.

As of March 31, 2023, borrowings under the TLA Term Loan consisted entirely of term benchmark borrowings at a rate of 7.97 %.

Term Loan B Facility

In December 2021, the Company entered into a term loan credit agreement (the “TLB Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent and the initial lender.

The term loan issued under the Credit Agreement (the “TLB Term Loan”) was issued at a 3.00 % discount and allowed for a single-advance term loan B facility in the principal amount of $ 375.0 million, which was secured by substantially all of the Company’s and each subsidiary guarantor’s assets.

The net proceeds of the TLB Term Loan were approximately $ 363.8 million after deducting an original issue discount of $ 11.2 million.

On March 31, 2023, the Company used the $ 149.6 million of net borrowings under the TLA Credit Agreement and cash on hand to repay the indebtedness outstanding under the TLB Credit Agreement and concurrently terminated the TLB Credit Agreement.

The Company incurred a prepayment fee of 2.00 % of the outstanding principal balance of the TLB Term Loan in connection with the termination.

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

March 31, December 31,

Term Loan maturing December 2026 $ — $ 296,875

2 unchanged sentences

Total debt, net of debt discount and deferred financing costs $ — $ 284,704

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 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).

Prepayment penalties for the Term Loan are 2 % in the first loan year plus an interest make-whole payment, 2 % in the second loan year, 1 % in the third loan year and nothing thereafter.

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

During the nine months ended September 30, 2022, the Company made scheduled principal payments of $ 18.8 million in the aggregate.

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,

During the three months ended March 31, 2023, the Company made a scheduled principal payment of $ 9.4 million and repaid the outstanding $ 287.5 million principal on the TLB Term Loan, which resulted in a $ 16.9 million loss on early extinguishment of debt.

Convertible Senior Notes Due 2025

In July 2020, the Company completed a private placement of $ 402.5 million in aggregate principal amount of its 0.750 % convertible senior notes due 2025, or 2025 Notes, and entered into an indenture with Computershare Corporate Trust, N.A.

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 15

events of default and other provisions.

As of September 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.

Term benchmark borrowings bear interest at a variable rate per annum equal to the Adjusted Term SOFR Rate (as defined in the Credit Agreement) (subject to a 75 basis points floor) plus an applicable margin of 700 basis points.

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 September 30, 2022, borrowings under the Term Loan consisted entirely of term benchmark borrowings at a rate of 9.21 %.

Convertible Senior Notes Due 2025

(formerly Wells Fargo Bank, N.A.), or 2025 Indenture, with respect to the 2025 Notes.

The 2025 Notes accrue interest at a fixed rate of 0.750 % per year, payable semiannually in arrears on February 1 st and August 1 st of each year.

1 unchanged sentence

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

September 30, December 31,

March 31, December 31,

0.750 % convertible senior notes due August 2025

1 unchanged sentence

Deferred financing costs ( 5,757 ) ( 6,374 )

Discount on debt — ( 64,718 )

Total debt, net of debt discount and deferred financing costs $ 396,743 $ 396,126

1 unchanged sentence

A portion of the net proceeds from the 2025 Notes was used by the Company to repurchase $ 185.0 million in aggregate principal amount of its then-outstanding 2.375 % convertible senior notes due 2022 in privately-negotiated transactions for a total of $ 211.1 million of cash (including accrued interest).

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 September 30, 2022, this condition for conversion was not met.

Holders may convert the 2025 Notes at any time prior to the close of business on the business day immediately preceding 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, 2023, the conditions for conversion were 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 September 30, 2022, the 2025 Notes had a market price o f $993 pe r $1,000 principal amount.

As of March 31, 2023, the 2025 Notes had a market price o f $926 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.

2 unchanged sentences

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

Pacira BioSciences, Inc.

| Q3 2022 Form 10-Q | Page 19

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.

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 September 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.

While the 2025 Notes are currently classified on the Company’s condensed consolidated balance sheet at March 31, 2023 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

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 16

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.

Convertible Senior Notes Due 2024 Assumed from the Flexion Acquisition

Prior to the Flexion Acquisition, on May 2, 2017, Flexion issued an aggregate of $ 201.3 million principal amount of 3.375 % convertible senior notes due 2024 (the “Flexion 2024 Notes”), pursuant to the indenture, dated as of May 2, 2017 (the “Original Flexion Indenture”), between Flexion and Wells Fargo Bank, N.A., as trustee (the “Flexion Trustee”), as supplemented by the First Supplemental Indenture, dated as of November 19, 2021, between Flexion and the Flexion Trustee (the “First Supplemental Flexion Indenture” and, together with the Original Flexion Indenture, the “Flexion Indenture”).

The Flexion 2024 Notes have a maturity date of May 1, 2024, are unsecured, and accrue interest at a rate of 3.375 % per annum, payable semi-annually on May 1 and November 1 of each year.

(formerly Wells Fargo Bank, N.A.), as trustee (the “Flexion Trustee”), as supplemented by the First Supplemental Indenture, dated as of November 19, 2021, between Flexion and the Flexion Trustee (the “First Supplemental Flexion Indenture” and, together with the Original Flexion Indenture, the “Flexion Indenture”).

The Flexion 2024 Notes mature on May 1, 2024, are unsecured and accrue interest at a rate of 3.375 % per annum, payable semi-annually on May 1 st and November 1 st of each year.

Upon the Flexion Acquisition, the principal was assumed and recorded at fair value by the Company.

Upon conversion of the Flexion 2024 Notes, at the election of each holder thereof, each Flexion 2024 Note was convertible into cash, shares of Flexion’s common stock, or a combination thereof, at Flexion’s election, at a conversion rate of approximately 37.3413 shares of Flexion common stock per $1,000 principal amount of the Flexion 2024 Notes, which corresponded to an initial conversion price of approximately $ 26.78 per share of Flexion’s common stock.

As a result of the Flexion Acquisition, and in connection with the Notice (as defined below), holders of the Flexion 2024 Notes became entitled to certain Flexion Acquisition-related conversion and repurchase rights, as discussed below.

In addition, as a result of the Flexion Acquisition and as discussed in more detail below, any future conversion rights are subject to the occurrence of any future events giving rise to such conversion rights under the Flexion Indenture.

On December 6, 2021, as a result of the Flexion Acquisition and in accordance with the Flexion Indenture, Flexion provided a Fundamental Change Company Notice and Offer to Purchase (the “Notice”) to the holders of the Flexion 2024 Notes and offered to repurchase for cash all of the outstanding Flexion 2024 Notes, at a repurchase price in cash equal to 100 % of the principal amount of the Flexion 2024 Notes being repurchased, plus accrued and unpaid interest thereon to, but excluding, January 7, 2022, subject to the terms and conditions set forth therein.

The offer to purchase expired at 5:00 p.m., New York City time, on January 6, 2022, as scheduled.

Any holder that did not exercise its repurchase right in accordance with the terms of the Notice retained the conversion rights associated with such holder’s Flexion 2024 Notes under the Flexion Indenture.

For conversion of Flexion 2024 Notes in connection with the Fundamental Change and the Make-Whole Fundamental Change (each as defined in the Flexion Indenture) resulting from the Flexion Acquisition, each $1,000 principal amount of the Flexion 2024 Notes was convertible into (i) $ 317.40 in cash and (ii) 37.3413 CVRs, based on the conversion rate of 37.3413, prior to 5:00 p.m., New York City time, on January 7, 2022.

Alternatively, holders could retain their Flexion 2024 Notes and such Flexion 2024 Notes would remain outstanding subject to their existing terms, including with respect to a holder’s right to receive interest payments on the Flexion 2024 Notes and exercise any future conversion rights that may arise under the Flexion Indenture.

As a result of the Flexion Acquisition, and in connection with a Fundamental Change Company Notice and Offer to Purchase (the “Notice”) to the holders of the Flexion 2024 Notes in accordance with the Flexion Indenture, holders of the Flexion 2024 Notes became entitled to certain Flexion Acquisition-related conversion and repurchase rights.

On December 6, 2021, as a result of the Flexion Acquisition and in accordance with the Flexion Indenture, the Company offered to repurchase for cash all of the outstanding Flexion 2024 Notes, at a repurchase price in cash equal to 100 % of the principal amount of the Flexion 2024 Notes being repurchased, plus accrued and unpaid interest thereon to, but excluding, January 7, 2022, subject to the terms and conditions set forth therein.

On January 7, 2022, following the expiration of the offer to purchase, the Company accepted the $ 192.6 million aggregate principal amount of Flexion 2024 Notes that were validly tendered (and not validly withdrawn).

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

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

Pacira BioSciences, Inc.

| Q3 2022 Form 10-Q | Page 20

Convertible Senior Notes Due 2022

In March 2017, the Company 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, 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):

September 30, December 31,

2.375 % convertible senior notes due April 2022

$ — $ 160,000

Deferred financing costs — ( 223 )

Discount on debt — ( 1,920 )

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

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.

At March 31, 2023, the remaining principal outstanding is $ 8.6 million.

Interest Expense

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Contractual interest expense $ 9,350 $ 9,130

5 unchanged sentences

Effective interest rate on total debt 5.36 % 5.58 %

Upon the adoption of ASU 2020-06 effective January 1, 2022, the Company eliminated the convertible debt discounts associated with the 2022 Notes and the 2025 Notes that were originally recorded as offsets to the embedded conversion features recognized in equity.

Effective January 1, 2022, the Company will not record interest expense on the previously recorded discounts on convertible debt.

The deferred financing costs previously allocated to the conversion features have since been re-allocated to the outstanding debt, slightly increasing the future annual amortization of deferred financing costs.

For additional information regarding the adoption of ASU 2020-06, see Note 2 , Summary of Significant Accounting Policies .

NOTE 9— FINANCIAL INSTRUMENTS

1 unchanged sentence

Fair value is defined as the price that would be received to sell an asset or be paid to transfer a liability in the principal or most advantageous market in an orderly transaction.

To increase consistency and comparability in fair value measurements, the FASB established a three-level hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

To increase consistency and comparability in fair value measurements, the Financial Accounting Standards Board (FASB) established a three-level hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The three levels of fair value measurements are:

9 unchanged sentences

The fair value of the Company’s acquisition-related contingent consideration is reported at fair value on a recurring basis (Level 3).

The carrying amounts of 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, whereas an equity investment was fully impaired during the three months ended September 30, 2022.

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

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.

At March 31, 2023, the carrying values and fair values of the following financial assets and liabilities were as follows (in thousands):

Carrying Value Fair Value Measurements Using

7 unchanged sentences

Financial Liabilities Measured at Amortized Cost:

Term loan facility due December 2026 $ 343,719 $ — $ 343,781 $ —

Term loan A facility due March 2028 $ 148,387 $ — $ 149,550 $ —

0.750 % convertible senior notes due 2025 (1)

2 unchanged sentences

$ 8,641 $ — $ 8,641 $ —

(1) The closing price of the Company’s common stock as reported on the Nasdaq Global Select Market was $ 53.19 per share at September 30, 2022 compared to a conversion price of $ 71.78 per share.

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

(1) The closing price of the Company’s common stock as reported on the Nasdaq Global Select Market was $ 40.81 per share at March 31, 2023 compared to a conversion price of $ 71.78 per share.

At March 31, 2023, as the conversion price was above the stock price, the requirements for conversion have not been met.

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 .

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

Equity and Convertible Note Investments

5 unchanged sentences

Purchases 11,750 1,250 13,000

Divestiture of investment ( 11,642 ) — ( 11,642 )

Impairment ( 10,000 ) — ( 10,000 )

Foreign currency adjustments — ( 67 ) ( 67 )

2 unchanged sentences

Purchases — 4,000 4,000

Impairment ( 10,000 ) — ( 10,000 )

Foreign currency adjustments — 23 23

Balance at September 30, 2022

Balance at March 31, 2023

$ 15,877 $ 9,338 $ 25,215

During the three and nine months ended September 30, 2022, an impairment of an equity investment of $ 10.0 million was recorded within other, net in the condensed consolidated statements of operations.

During the nine months ended September 30, 2021, the Company sold an equity investment for net cash proceeds of $ 9.1 million and recognized a realized loss of $ 2.6 million, which was recorded in other, net in the condensed consolidated statements of operations.

The fair value of the divested equity investment was based on a Level 1 input.

Subsequent to March 31, 2023, the Company invested in a € 2.5 million convertible note receivable in April 2023.

Acquisition-Related Contingent Consideration

The Company has recognized contingent consideration related to the Flexion Acquisition and the MyoScience Acquisition in the amount of $ 39.7 million and $ 28.1 million as of March 31, 2023 and December 31, 2022, respectively.

For more information, see Note 14, Acquisition-Related Charges (Gains) and Other .

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 18

Acquisition-Related Contingent Consideration

The Company has recognized contingent consideration related to the Flexion Acquisition and the MyoScience Acquisition in the amount of $ 34.2 million and $ 57.6 million as of September 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.

3 unchanged sentences

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 $ 372.3 million if certain regulatory and commercial milestones are met.

The aggregate amount was initially $ 425.5 million prior to the Company’s September 2022 decision to formally discontinue further development of Flexion’s product candidate, PCRX-301.

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 nine months ended September 30, 2022 , the Company recorded gains of $ 0.5 million and $ 13.8 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 September 30, 2022, the weighted average discount rate was 14.4 % and the probability of success for the remaining regulatory milestone was 20.0 %.

As of September 30, 2022 and December 31, 2021, a contingent consideration liability related to the Flexion Acquisition was recognized in the amount of $ 32.6 million and $ 46.4 million, respectively.

During the three months ended March 31, 2023 and 2022 , the Company recorded a charge of $ 11.6 million and a gain of $ 0.8 million, respective ly.

The charge incurred during the three months ended March 31, 2023 was due to a decrease in the assumed discount rate that is utilized in calculating the liability’s present value, based on a significant improvement in the Company’s incremental borrowing rate resulting from the March 2023 entry into the TLA Credit Agreement.

These adjustments were recorded as acquisition-re lated charges (gains) in the condensed consolidated statements of operations.

At March 31, 2023, the weighted average discount rate was 9.4 % and the probability of payment for the achievement of the remaining regulatory milestone by the expiration date was 12.5 %.

As of March 31, 2023 and December 31, 2022, a contingent consideration liability related to the Flexion Acquisition was recognized in the amount of $ 39.7 million and $ 28.1 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 September 30, 2022, the maximum potential remaining milestone payments to be paid are $ 43.0 million.

The Company recognized contingent consideration gains of $ 0.5 million and $ 9.6 million during the three and nine months ended September 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 contingent consideration gains of $ 1.2 million and $ 2.1 million during the three and nine months ended September 30, 2021 , respectively .

At September 30, 2022, the weighted average discount rate was 12.8 % and the probability of success for the regulatory milestone that has not yet been met was reduced to zero .

As of September 30, 2022 and December 31, 2021, a contingent consideration liability related to the MyoScience Acquisition has been recognized in the amounts of $ 1.6 million and $ 11.2 million, respectively.

As of March 31, 2023, the maximum potential remaining milestone payments to be paid are $ 43.0 million.

At March 31, 2023, the probability of success for the regulatory milestone that has not yet been met was assessed as zero .

As of March 31, 2023 and December 31, 2022, a contingent consideration liability related to the MyoScience Acquisition has been assessed as zero .

During the three months ended March 31, 2022 , the Company recorded a gain of $ 0.3 million.

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

1 unchanged sentence

Utilized as of

September 30, 2022

MyoScience Ranges

Utilized as of

September 30, 2022

March 31, 2023

Discount rates 9.1 % to 9.8 %

12.25 % to 13.28 %

Probabilities of payment for regulatory milestones 0 % to 12.5 %

Projected years of payment for regulatory and commercial milestones 2027 to 2030

Projected years of payment for regulatory and commercial milestones 2030

The change in the Company’s contingent consideration recorded at fair value using Level 3 measurements is as follows (in thousands):

2 unchanged sentences

Fair value adjustments and accretion ( 29,476 )

Balance at September 30, 2022

Pacira BioSciences, Inc.

| Q3 2022 Form 10-Q | Page 23

Balance at December 31, 2022

Fair value adjustments and accretion 11,618

Balance at March 31, 2023

Available-for-Sale Investments

Short-term investments consist of asset-backed securities collateralized by credit card receivables, investment grade commercial paper and corporate, federal agency and government bonds with maturities greater than three months, but less than one year.

Noncurrent investments consist of federal agency bonds with maturities greater than one year but less than three years.

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 September 30, 2022 and December 31, 2021, all of the Company’s short-term and noncurrent 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.

Noncurrent investments consist of federal agency bonds and government bonds with maturities greater than one year but less than three years.

Net unrealized gains and losses (excluding credit losses, if any) from the Company’s short-term

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 19

investments are reported in other comprehensive (loss) income.

At March 31, 2023 and December 31, 2022, all of the Company’s short-term and noncurrent 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.

1 unchanged sentence

The fair value of the asset-backed securities and corporate bonds is principally measured or corroborated by trade data for identical issues in which related trading activity is not sufficiently frequent to be considered a Level 1 input or that of comparable securities.

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

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

September 30, 2022 Investments

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

The following summarizes the Company’s short-term and noncurrent available-for-sale investments at March 31, 2023 and December 31, 2022 (in thousands):

March 31, 2023 Investments

Losses Fair Value

1 unchanged sentence

Commercial paper 59,924 — ( 138 ) 59,786

Corporate bonds 2,000 — — 2,000

federal agency bonds 61,269 2 ( 322 ) 60,949

2 unchanged sentences

federal agency bonds 3,503 10 — 3,513

government bonds 4,762 6 — 4,768

Subtotal 8,265 16 — 8,281

Total $ 147,198 $ 18 $ ( 481 ) $ 146,735

3 unchanged sentences

Commercial paper 134,423 23 ( 386 ) 134,060

Corporate bonds 9,936 102 — 10,038

federal agency bonds 41,971 — ( 337 ) 41,634

government bonds 2,003 — ( 18 ) 1,985

Subtotal $ 185,233 $ 23 $ ( 744 ) $ 184,512

federal agency bonds 22,783 2 ( 66 ) 22,719

government bonds 14,499 — ( 9 ) 14,490

Subtotal 37,282 2 ( 75 ) 37,209

Total $ 222,515 $ 25 $ ( 819 ) $ 221,721

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

At March 31, 2023, 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 September 30, 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.

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.

At March 31, 2023 and December 31, 2022, the interest receivable from its available-for-sale investments recognized in prepaid expenses and other current assets was $ 0.6 million and $ 0.8 million, respectively.

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

The Company maintains its cash and cash equivalents with high-credit quality financial institutions.

Such amounts may exceed federally-insured limits.

As of September 30, 2022, three wholesalers each accounted for over 10% of the Company’s accounts receivable, at 33 %, 18 % and 18 %.

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

For additional information regarding the Company’s wholesalers, see Note 2 , Summary of Significant Accounting Policies .

EXPAREL and ZILRETTA revenues are primarily derived from major wholesalers and specialty distributors that generally have significant cash resources.

The Company performs ongoing credit evaluations of its customers as warranted and generally does not require collateral.

Allowances for credit losses on the

As of March 31, 2023, three wholesalers each accounted for over 10% of the Company’s accounts receivable, at 38 %, 20 % and 18 %.

At December 31, 2022, three wholesalers each accounted for over 10% of the Company’s accounts receivable, at 34 %, 19 % and 18 %.

For additional information regarding the Company’s wholesalers, see Note 2 , Summary of Significant

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 20

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

Accounting Policies .

EXPAREL and ZILRETTA revenues are primarily derived from major wholesalers and specialty distributors that generally have significant cash resources.

The Company performs ongoing credit evaluations of its customers as warranted and generally does not require collateral.

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, 2023 and December 31, 2022, the Company did no t deem any allowances for credit losses on its accounts receivable necessary.

NOTE 10— STOCKHOLDERS’ EQUITY

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

Accumulated Other Comprehensive Loss

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

Net Unrealized Gain (Loss) From Available-For-Sale Investments Unrealized Foreign Currency Translation Accumulated Other Comprehensive Loss

Balance at December 31, 2022

$ ( 523 ) $ 143 $ ( 380 )

Net unrealized loss on investments, net of tax (1)

( 1,056 ) — ( 1,056 )

Net unrealized gain on investments, net of tax (1)

Foreign currency translation adjustments — ( 8 ) ( 8 )

Balance at September 30, 2022

Balance at March 31, 2023

$ ( 272 ) $ 135 $ ( 137 )

Net Unrealized (Loss) Gain From Available

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

Net Unrealized (Loss) Gain From Available-For-Sale Investments Unrealized Foreign Currency Translation Accumulated Other Comprehensive (Loss) Income

Balance at December 31, 2021

3 unchanged sentences

Foreign currency translation adjustments — 39 39

Balance at September 30, 2021

Balance at March 31, 2022

$ ( 594 ) $ 67 $ ( 527 )

(1) Net of a $ 0.3 million and $ 0.1 million tax benefit for the nine months ended September 30, 2022 and 2021, respectively.

(1) Net of a $ 0.2 million tax expense and $ 0.3 million tax benefit for the three months ended March 31, 2023 and 2022, respectively.

NOTE 11— STOCK PLANS

2 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Cost of goods sold $ 1,724 $ 1,352

10 unchanged sentences

Equity Awards

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

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

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, 2023:

Stock Options Number of

Stock Options Weighted Average Exercise Price (Per Share)

Outstanding at December 31, 2022

4 unchanged sentences

Expired ( 28,376 ) 58.91

Outstanding at September 30, 2022

Outstanding at March 31, 2023

6,345,921 52.07

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

Restricted Stock Units Number of

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

Unvested at December 31, 2022

3 unchanged sentences

Forfeited ( 29,866 ) 59.29

Unvested at September 30, 2022

Unvested at March 31, 2023

1,118,209 56.57

The weighted average fair value of stock options granted during the nine months ended September 30, 2022 wa s $ 25.66 per share.

The weighted average fair value of stock options granted during the three months ended March 31, 2023 wa s $ 16.78 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 Nine Months Ended September 30, 2022

Black-Scholes Weighted Average Assumption Three Months Ended March 31, 2023

Expected dividend yield None

3 unchanged sentences

Employee Stock Purchase Plan

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 nine months ended September 30, 2022, 36,729 shares were purchased and issued through the ESPP.

The Company’s Amended and Restated 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.

During the three months ended March 31, 2023, no shares were purchased and issued through the ESPP.

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 22

NOTE 13— NET INCOME (LOSS) PER SHARE

Basic net income (loss) per share is calculated by dividing the net income (loss) attributable to common shares by the weighted average number of common shares outstanding during the period.

Diluted net income (loss) per common share is calculated by dividing the net income (loss) attributable to common shares by the weighted average number of common shares outstanding plus dilutive potential common shares outstanding during the period.

ASU 2020-06 was adopted on January 1, 2022 and requires the Company to use the if-converted method to calculate the number of potentially dilutive shares for convertible debt.

Under the if-converted method, adjustments are made to the diluted net income (loss) per common share calculation as if the Company had converted the convertible debt on the first day of each period presented.

NOTE 12— NET (LOSS) INCOME PER SHARE

Basic net (loss) income per share is calculated by dividing the net (loss) income attributable to common shares by the weighted average number of common shares outstanding during the period.

Diluted net (loss) income per common share is calculated by dividing the net (loss) income attributable to common shares by the weighted average number of common shares outstanding plus dilutive potential common shares outstanding during the period.

Potential common shares include the shares of common stock issuable upon the exercise of outstanding stock options, the vesting of RSUs and the purchase of shares from the ESPP (using the treasury stock method), if applicable.

Potential common shares associated with convertible notes are treated under the if-converted method, adjustments are made to the diluted net (loss) income per common share calculation as if the Company had converted the convertible debt on the first day of each period presented.

Adjustments to the numerator are made to add back the interest expense associated with the convertible debt on a post-tax basis.

Adjustments to the denominator reflect the number of shares assumed to be convertible at the beginning of the period.

For additional information regarding ASU 2020-06, see Note 2 , Summary of Significant Accounting Policies .

Prior to January 1, 2022, the Company used the treasury stock method to calculate dilutive shares on its convertible debt.

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

As the Company reported a net loss for the three months ended September 30, 2022, no potentially dilutive securities have been included in the computation of diluted net loss per share for that period.

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

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

As the Company reported a net loss for the three months ended March 31, 2023, no potentially dilutive securities have been included in the computation of diluted net loss per share for that period.

The following table sets forth the computation of basic and diluted net (loss) income per common share for the three mon ths ended March 31, 2023 and 2022 (in thousands, except per share amounts):

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Net (loss) income—basic $ ( 19,536 ) $ 6,828

ASU 2020-06 convertible notes if-converted method adjustment — — 3,112 —

Adjusted net (loss) income—diluted ( 693 ) 17,660 29,123 47,110

Weighted average common shares outstanding—basic 45,949 44,869

Computation of diluted securities:

ASU 2020-06 convertible notes if-converted method adjustment — — 5,608 —

Dilutive effect of stock options — 1,195

Dilutive effect of RSUs — 373

Dilutive effect of conversion premium on the 2022 Notes — — — 51

Dilutive effect of ESPP purchase options — 1

3 unchanged sentences

Diluted net (loss) income per common share $ ( 0.43 ) $ 0.15

Pacira BioSciences, Inc.

| Q3 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 (loss) income per common share calculation because the effects of including these potential shares were antidilutive in the periods presented (in thousands):

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Weighted average number of stock options 6,362 1,762

3 unchanged sentences

Total 13,162 9,779

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 23

NOTE 13— INCOME TAXES

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

(Loss) i ncome before income taxes and income tax benefit (expense) are as follows (dollar amounts in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Income before income taxes:

(Loss) income before income taxes:

Domestic $ ( 27,773 ) $ 6,582

Foreign 1,299 712

Total income before income taxes $ 2,069 $ 24,231 $ 31,370 $ 62,602

Income tax expense $ 2,762 $ 6,571 $ 5,359 $ 15,492

Total (loss) income before income taxes $ ( 26,474 ) $ 7,294

Income tax benefit (expense) $ 6,938 $ ( 466 )

Effective tax rate 26 % 6 %

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

The Company’s effective tax rates for the three months ended September 30, 2022 and September 30, 2021 include non-deductible executive compensation and valuation allowances recorded against non-U.S.

results and deductible capital losses.

The three months ended September 30, 2022 also includes benefits for a first quarter Skyepharma milestone payment and a fair value adjustment for Flexion contingent consideration.

The Company’s effective tax rates for the nine months ended September 30, 2022 and September 30, 2021 include non-deductible executive co mpensation costs and valuation allowances recorded against non-U.S.

results and deductible capital losses, offset by benefits related to stock based compensation.

The nine months ended September 30, 2022 also include benefits for a first quarter Skyepharma milestone payment and a fair value adjustment for Flexion contingent consideration.

Pacira BioSciences, Inc.

| Q3 2022 Form 10-Q | Page 28

The Company’s effective tax rate for the three months ended March 31, 2023 includes costs for a fair value adjustment to Flexion contingent consideration and a valuation allowance recorded against non-U.S.

results, partially offset by tax credits and stock-based compensation benefits.

The Company’s effective tax rate for the three months ended March 31, 2022 includes benefits related to stock-based compensation, a Skyepharma milestone payment and a valuation allowance recorded against non-U.S.

NOTE 14— ACQUISITION–RELATED CHARGES (GAINS) AND OTHER

Acquisition-related charges (gains) and other for the three and nine months ended September 30, 2022 and 2021 summarized below (in thousands):

Acquisition-related charges (gains) and other for the three months ended March 31, 2023 and 2022 summarized below (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Severance-related expenses $ — $ 3,115

4 unchanged sentences

MyoScience contingent consideration — ( 277 )

Nuance Biotech Co.

agreement dissolution costs — — — 3,000

Total acquisition-related charges (gains) and other $ 12,107 $ 4,337

Flexion Acquisition

The Company recognized acquisition-related costs of $ 1.5 million and $ 10.2 million during the three and nine months ended September 30, 2022, respectively , primarily for severance, legal fees, third-party services and other one-time charges related to the Flexion Acquisition.

The Company recognized acquisition-related costs of $ 1.0 million during the three and nine months ended September 30, 2021 primarily related to legal fees.

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 and nine months ended September 30, 2022 , the Company recorded $ 0.5 million and $ 13.8 million gains, respectively, due to a decrease to the fair value of its contingent consideration.

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 $ 0.5 million and $ 9.6 million contingent consideration gains during the three and nine months ended September 30, 2022 , respectively .

The Company recognized $ 1.2 million and $ 2.1 million contingent consideration gains during the three and nine months ended September 30, 2021 , respectively .

The Company recognized acquisition-related costs of $ 0.5 million during the three months ended March 31, 2023 , primarily related to the remaining Flexion leases.

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

The Company recognized $ 11.6 million contingent consideration charges during the three months ended March 31, 2023 due to a decrease in the assumed discount rate that is utilized in calculating the liability’s present value, as the Company’s incremental borrowing rate has significantly improved resulting from the March 2023 entry into the TLA Credit Agreement.

The Company recognized $ 0.8 million of contingent consideration gains during the three months ended March 31, 2022 .

See Note 9 , 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.

The Company recognized acquisition-related costs of $ 0.4 million during the three and nine months ended September 30, 2021 primarily related to one-time termination benefits fees.

Nuance Biotech Co.

In June 2018, the Company entered an agreement with Nuance Biotech Co.

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

Under the terms of the agreement, the Company had granted Nuance the exclusive rights to develop and commercialize EXPAREL.

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, which resulted in dissolution costs of $ 3.0 million for the nine months ended September 30, 2021.

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 24

MyoScience Acquisition

The Company recognized $ 0.3 million of contingent consideration gains during the three months ended March 31, 2022.

NOTE 15— COMMITMENTS AND CONTINGENCIES

3 unchanged sentences

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

(“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.

In October 2020, Fortis filed an answer and counterclaim against the Company and Pacira CryoTech seeking to recover 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 “MyoScience Merger Agreement”), specifically related to the achievement of certain milestone payments under the MyoScience 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 MyoScience Merger Agreement, and breach of the MyoScience Merger Agreement and certain other agreements with the defendants.

In October 2020, Fortis filed an answer and counterclaim against the Company and Pacira CryoTech seeking to recover certain milestone payments under the MyoScience Merger Agreement.

The total remaining value of these milestones is $ 30.0 million, plus attorneys’ fees.

2 unchanged sentences

eVenus Pharmaceutical Laboratories Litigations

In October 2021, the Company received a Notice Letter advising that eVenus Pharmaceutical Laboratories, Inc., or eVenus, of Princeton, New Jersey, submitted to the FDA an Abbreviated New Drug Application (ANDA) with a Paragraph IV certification seeking authorization for the manufacturing and marketing of a generic version of EXPAREL (266 mg/20 mL) in the U.S.

In October 2021, the Company received a Notice Letter advising that eVenus Pharmaceutical Laboratories, Inc., or eVenus, of Princeton, New Jersey, submitted to the FDA an Abbreviated New Drug Application, or ANDA with a Paragraph IV certification seeking authorization for the manufacturing and marketing of a generic version of EXPAREL (266 mg/20 mL) in the U.S.

prior to the expiration of U.S.

13 unchanged sentences

This filing triggered a second automatic 30-month stay of final approval for the 133 mg/10 mL ANDA product.

These litigations are in their early stages, and the Company is unable to predict the outcome of this action at this time.

In April 2023, the Company filed a third patent infringement suit against eVenus, its parent company, and Fresenius Kabi USA, LLC, in the U.S.

District Court for the District of New Jersey (23-cv-2367) asserting that the 133 mg/10 mL and 266 mg/20 mL ANDA products will infringe U.S.

11,426,348 (the ’348 patent).

These litigations are in their early stages, and the Company is unable to predict their outcome at this time.

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 25

Research Development Foundation

1 unchanged sentence

RDF has the right to terminate the agreement for an uncured material breach by the Company, in connection with its bankruptcy or insolvency or if it directly or indirectly opposes or disputes the validity of the assigned patent rights.

The Company’s U.S.

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

The Company’s ’495 patent issued on June 15, 2021.

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

The Company believes that the royalty period under the agreement was set to end on December 24, 2021 with the expiration of its U.S.

The Company believes that the royalty period under the agreement ended on December 24, 2021 with the expiration of its U.S.

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

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

The lawsuit seeks a

Pacira BioSciences, Inc.

| Q3 2022 Form 10-Q | Page 30

declaration from the court that the Company owes no royalties to RDF with respect to its EXPAREL product after December 24, 2021.

The lawsuit seeks a declaration from the court that the Company owes no royalties to RDF with respect to its EXPAREL product after December 24, 2021.

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.

1 unchanged sentence

Pediatric Trial Commitments

The FDA, as a condition of EXPAREL approval, has required the Company to study EXPAREL in pediatric patients, as well as the administration of EXPAREL as a nerve block in the pediatric setting.

The Company was granted a deferral for the required pediatric trials until after the indications were approved in adults.

The FDA, as a condition of EXPAREL approval, has required the Company to study EXPAREL for infiltration and as a brachial plexus block in the pediatric setting.

The Company was granted deferrals for the required pediatric trials until after the indications were approved in adults.

Similarly, in Europe, the Company agreed with the European Medicines Agency, or EMA, on a Pediatric Investigation Plan as a prerequisite for submitting a Marketing Authorization Application (MAA) in the E.U.

2 unchanged sentences

Those positive results were the basis for the submission of a supplemental New Drug Application, or sNDA, in the U.S.

and Type II variations in the E.U.

to expand the EXPAREL label to include use in patients six years of age and older for single-dose infiltration to produce postsurgical local analgesia.

In March 2021, the Company announced that the FDA approved the submission of the sNDA in the U.S.

The EMA and the Medicines and Healthcare Products Regulatory Agency, or MHRA, are still reviewing the Type II variations.

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 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 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.

In July 2022, the Company submitted a letter to HK Tainuo associated with this license agreement seeking a mutual decision to end the licensing agreement.

As of September 30, 2022, $ 10.0 million was recognized as part of acquisition accounting within other liabilities in the condensed consolidated balance sheet related to this matter.

to include use in patients six years of age and older for single-dose infiltration to produce postsurgical local analgesia.

In March 2021, the Company announced that the FDA approved the sNDA in the U.S.

and U.K., the Company also submitted the results of the PLAY study as Type II variations in the E.U.

to include the use of EXPAREL in children aged six years or older as a field block for treatment of somatic post-operative pain for small- to medium-sized wounds.

The EMA and the Medicines and Healthcare Products Regulatory Agency, or MHRA, in the U.K.

both approved the variations in their respective regions in November 2022.

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

Contingent Milestone Payments

Refer to Note 9, Financial Instruments , for information on potential contingent milestone payments related to the Flexion Acquisition and MyoScience Acquisition.

PCRX-201, a novel, intra-articular gene therapy product candidate that produces the anti-inflammatory protein interleukin-1 receptor antagonist (IL-1Ra) treating OA pain in the knee, was added to the Company’s portfolio as part of the Flexion Acquisition.

Prior to the Flexion Acquisition, in February 2017, Flexion entered into an agreement with GQ Bio Therapeutics GmbH (formerly named GeneQuine Biotherapeutics GmbH) to acquire the global rights to PCRX-201, a gene therapy product candidate.

As part of the agreement, up to an aggregate of $ 56.0 million of payments could become due upon the achievement of certain development and regulatory milestones, including up to $ 4.5 million through initiation of a Phase 2 proof of concept clinical trial and, following successful proof of concept, up to an additional $ 51.5 million in development and global regulatory approval milestone payments.

Pacira BioSciences, Inc.

3 unchanged sentences

This Quarterly Report on Form 10-Q and certain other communications made by us contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995, including, without limitation, statements related to:

the Flexion Acquisition (as defined below) and the costs and benefits thereof, our growth and future operating results and trends, our strategy, plans, objectives, expectations (financial or otherwise) and intentions, future financial results and growth potential, anticipated product portfolio, development programs, strategic alliances, patent terms and intellectual property.

the Flexion Acquisition (as defined below) and the costs and benefits thereof, our growth and future operating results and trends, our strategy, plans, objectives, expectations (financial or otherwise) and intentions, future financial results and growth potential, including our plans with respect to the repayment of our indebtedness, anticipated product portfolio, development programs, patent terms, development of products, strategic alliances and intellectual property.

For this purpose, any statement that is not a statement of historical fact should be considered a forward-looking statement.

2 unchanged sentences

Actual results may differ materially from these indicated by such forward-looking statements as a result of various important factors, including risks relating to, among others:

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 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;

the success of our sales and manufacturing efforts in support of the commercialization of EXPAREL ® (bupivacaine liposome injectable suspension), ZILRETTA ® (triamcinolone acetonide extended-release injectable suspension) and iovera° ® and the rate and degree of market acceptance of EXPAREL, ZILRETTA and iovera°;

risks associated with acquisitions, such as the risk that the acquired 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 lingering impact of the COVID-19 pandemic on elective surgeries, our manufacturing and supply chain, global and United States, or U.S., economic conditions (including inflation and rising interest rates), and our business, including our revenues, financial condition, cash flows and results of operations;

the rate and degree of market acceptance of EXPAREL, ZILRETTA and iovera°;

the size and growth of the potential markets for EXPAREL, ZILRETTA and iovera° and our ability to serve those markets;

2 unchanged sentences

the related timing and success of United States Food and Drug Administration, or FDA, supplemental New Drug Applications, or sNDAs, and premarket notification 510(k)s;

the related timing and success of European Medicines Agency, or EMA, Marketing Authorization Applications, or MAA;

the related timing and success of European Medicines Agency, or EMA, Marketing Authorization Applications, or MAAs;

our plans to evaluate, develop and pursue additional product candidates utilizing our proprietary multivesicular liposome, or pMVL, drug delivery technology;

1 unchanged sentence

clinical trials in support of an existing or potential pMVL-based product;

our commercialization and marketing capabilities, our ability to successfully construct an additional EXPAREL manufacturing suite in San Diego, California;

our ability to successfully complete a ZILRETTA capacity expansion project in Swindon, England;

our commercialization and marketing capabilities;

our ability to successfully complete an EXPAREL capacity expansion project in San Diego, California;

our ability to successfully complete a ZILRETTA capital project in Swindon, England;

the outcome of any litigation;

the ability to successfully integrate Flexion or any future acquisitions into our existing business;

the ability to successfully integrate any future acquisitions into our existing business;

the recoverability of our deferred tax assets;

11 unchanged sentences

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.

EXPAREL utilizes our unique pMVL drug delivery technology that encapsulates drugs without altering their molecular structure and releases them over a desired period of time.

Our long-acting, local analgesic EXPAREL ® (bupivacaine liposome injectable suspension) utilizes our unique pMVL drug delivery technology that encapsulates drugs without altering their molecular structure and releases them over a desired period of time.

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

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

In the European Union, or E.U., and the United Kingdom, or U.K., EXPAREL is approved as a brachial plexus block or femoral nerve block for treatment of post-operative pain in adults, and as a field block for treatment of somatic post-operative pain from small- to medium-sized surgical wounds in adults.

In Europe, EXPAREL is approved as a brachial plexus block or femoral nerve block for treatment of post-operative pain in adults, and as a field block for treatment of somatic post-operative pain from small- to medium-sized surgical wounds in adults and children aged six years and older.

Since its initial approval in 2011, more than 12 million patients have been treated with EXPAREL.

We drop-ship EXPAREL directly to end-users based on orders placed to wholesalers or directly to us, and there is no product held by wholesalers.

With the acquisition of Flexion Therapeutics, Inc.

(“Flexion”) in November 2021 (the “Flexion Acquisition”), we acquired ZILRETTA ® (triamcinolone acetonide extended-release injectable suspension), the first and only extended-release, intra-articular therapy that can provide major relief for osteoarthritis, or OA, knee pain for three months and has the potential to become an alternative to hyaluronic acid, or HA, and platelet rich plasma, or PRP, injections or other early intervention treatments.

With the acquisition of MyoScience, Inc.

(the “MyoScience Acquisition” ) in April 2019, we acquired iovera° ® , a handheld cryoanalgesia device used to deliver a precise, controlled application of cold temperature to targeted nerves, which we sell directly to end users.

With the acquisition of Flexion Therapeutics, Inc., or Flexion, (the “Flexion Acquisition”) in November 2021, we acquired ZILRETTA ® (triamcinolone acetonide extended-release injectable suspension), the first and only extended-release, intra-articular therapy that can provide major relief for osteoarthritis, or OA, knee pain for three months and has the potential to become an alternative to hyaluronic acid, platelet rich plasma injections or other early intervention treatments.

With the acquisition of MyoScience, Inc., or MyoScience, (the “MyoScience Acquisition” ) in April 2019, we acquired iovera° ® , a handheld cryoanalgesia device used to deliver a precise, controlled application of cold temperature to targeted nerves, which we sell directly to end users.

EXPAREL, ZILRETTA and the iovera° system are highly complementary products as long-acting, non-opioid therapies that alleviate pain.

1 unchanged sentence

progress our earlier-stage product candidate pipeline;

advance regulatory activities for EXPAREL, ZILRETTA, iovera° and other product candidates;

advance regulatory activities for EXPAREL, ZILRETTA, iovera° and our other product candidates;

invest in sales and marketing resources for EXPAREL, ZILRETTA and iovera°;

2 unchanged sentences

and support legal matters.

Flexion Acquisition

In November 2021, we completed the Flexion Acquisition pursuant to an Agreement and Plan of Merger (the “Merger Agreement”), under which Flexion became our wholly owned subsidiary and added ZILRETTA, a non-opioid corticosteroid that employs a proprietary microsphere technology to provide extended pain relief, to our commercial offering.

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

The total consideration of $578.8 million included an initial payment of $428.3 million which represented $8.50 in cash per share of Flexion common stock, $20.2 million paid to settle restricted stock units and in-the-money stock options, an $85.1 million cash payment to repay Flexion debt that was not assumed by us and $45.2 million in contingent consideration representing the fair value of contingent value rights, or CVRs, that were issued in conjunction with the Flexion Acquisition.

The Merger Agreement provided for one non-tradeable CVR per share of Flexion common stock as well as one CVR per share for certain Flexion equity awards.

Each CVR entitles Flexion shareholders to contingent milestone payments of up to an aggregate of $8.00 in cash per share of Flexion common stock if certain milestones are met on or prior to December 31, 2030.

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.

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

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.

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.

| Q3 2022 Form 10-Q | Page 33

secure a sufficient supply of materials.

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

Global Economic Conditions

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

Such impacts may include, but are not limited to, the effect of prolonged periods of inflation on our customers and suppliers and longer lead-times or the inability to secure a sufficient supply of materials.

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.

We will continue to actively monitor the situation and implement measures recommended by federal, state or local authorities, or that we determine are in the best interests of our patients, employees, partners, suppliers, shareholders and stakeholders.

For a description of risks facing us that relate to the COVID-19 pandemic or any other future pandemic, epidemic or outbreak of contagious disease, see our Annual Report on Form 10-K for the year ended December 31, 2021 .

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

Recent Highlights

Patent and Trademark Office, or USPTO, issued Patent No.

11,452,691 in October 2022, which is a chemical composition patent and was submitted in the FDA Approved Drug Products with Therapeutic Equivalence Evaluations (the “Orange Book”).

With this patent, there are eight EXPAREL patents listed in the Orange Book, each with an expiration date of January 22, 2041.

We also received a Notice of Allowance from the USPTO for a U.S.

Patent Application that is a product by process patent for EXPAREL.

After issuance, we will submit this patent for listing in the Orange Book.

• In September 2022, we announced positive topline results from two Phase 3 registration studies of EXPAREL as a single-dose nerve block for postsurgical regional analgesia in lower extremity surgeries.

The first study, which evaluated EXPAREL as a femoral nerve block in the adductor canal in patients undergoing total knee arthroplasty, or TKA, achieved the primary endpoint demonstrating a statistically significant reduction in cumulative pain scores from 0 to 96 hours compared with bupivacaine HCl (p<0.01).

EXPAREL also achieved a statistically significant reduction in postsurgical opioid consumption through 96 hours (p<0.01) compared with bupivacaine HCl, a key secondary endpoint.

The second study, which evaluated EXPAREL as a sciatic nerve block in the popliteal fossa in patients undergoing bunionectomy, achieved the primary endpoint by demonstrating a statistically significant reduction in cumulative pain scores from 0 to 96 hours compared with bupivacaine HCl (p<0.00001).

EXPAREL also achieved statistically significant reductions in postsurgical opioid consumption (p<0.00001) and percentage of opioid-free subjects (p<0.001) through 96 hours compared with bupivacaine HCl, which were key secondary endpoints.

EXPAREL was well tolerated with a safety profile consistent with bupivacaine HCl.

With these positive results, we plan to submit an sNDA to the FDA early next year seeking expansion of the EXPAREL label to include femoral nerve block in the adductor canal.

• In September 2022, we announced that the EMA’s Committee for Medicinal Products for Human Use (CHMP) adopted a positive opinion recommending marketing authorization for an expanded indication of EXPAREL to include use in children aged 6 years and older as a field block for treatment of somatic post-operative pain from small- to medium-sized surgical wounds.

We expect a decision from the European Commission, or EC, on the expanded indication in November 2022.

The positive opinion was based on the results of the Phase 3 PLAY study of EXPAREL infiltration in pediatric patients undergoing spinal or cardiac surgeries.

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

The EC decision will be applicable to all 27 E.U.

member states plus Iceland, Norway and Liechtenstein.

The data is still under review in the U.K.

EXPAREL was initially approved by the EC and in the U.K.

in November 2020 as a brachial plexus block or femoral nerve block for treatment of post-operative pain in adults, and as a field block for treatment of somatic post-operative pain from small- to medium-sized surgical wounds in adults.

• In January 2023, we submitted our sNDA to the FDA seeking expansion of the EXPAREL label to include sciatic nerve blocks in the popliteal fossa and femoral nerve blocks in the adductor canal, with an anticipated FDA action date under the Prescription Drug User Fee Act, or PDUFA, of November 13, 2023.

The sNDA is supported by two successful Phase 3 studies in which EXPAREL achieved statistically significant reductions in postsurgical pain control and opioid consumption through 96 hours compared with bupivacaine HCl.

• In January 2023, we opened our second Innovation and Training Center in Houston, Texas.

This state-of-the-art facility features a 125-seat adaptive lecture hall, broadcast studio and both wet and dry lab space for cadaver and other interactive workshops, as well as advanced ultrasound machines equipped with artificial intelligence training software.

This training center is core to developing physician thought leaders and community-based clinicians wanting to stay at the forefront of opioid-sparing pain management.

• In March 2023, we retired our term loan B debt facility using net proceeds from a new $150.0 million 5-year senior term loan A debt facility and existing cash resources.

The TLA Term Loan (as defined below) carries a significantly lower interest rate than the retired TLB Term Loan (as defined below).

For more information, see Note 8, Debt , to our condensed consolidated financial statements included herein.

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 28

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

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

In the E.U., EXPAREL is indicated as a brachial plexus block and femoral nerve block for treatment of post-operative pain in adults, and as a field block for treatment of somatic post-operative pain from small- to medium-sized surgical wounds in adults.

In Europe, EXPAREL is approved as a brachial plexus block or femoral nerve block for treatment of post-operative pain in adults and as a field block for treatment of somatic post-operative pain from small- to medium-sized surgical wounds in adults, and in children aged 6 years or older as a field block for treatment of somatic post-operative pain from small- to medium-sized surgical wounds.

EXPAREL Label and Global Expansion

• Lower extremity nerve block.

We have completed two Phase 3 registration studies of EXPAREL as a nerve block in lower extremity surgeries.

In September 2022, we announced positive topline results from two Phase 3 registration studies of EXPAREL as a single-dose nerve block for postsurgical regional analgesia in lower extremity surgeries.

The first study, which evaluated EXPAREL as a femoral nerve block in the adductor canal in patients undergoing TKA

Pacira BioSciences, Inc.

| Q3 2022 Form 10-Q | Page 34

achieved the primary endpoint demonstrating a statistically significant reduction in cumulative pain scores from 0 to 96 hours compared with bupivacaine HCl (p<0.01).

EXPAREL also achieved a statistically significant reduction in postsurgical opioid consumption through 96 hours (p<0.01) compared with bupivacaine HCl, a key secondary endpoint.

The first study, which evaluated EXPAREL admixed with bupivacaine HCl as a femoral nerve block in the adductor canal in patients undergoing total knee arthroplasty, or TKA, achieved the primary endpoint, demonstrating a statistically significant reduction in cumulative pain scores from 0 to 96 hours compared with bupivacaine HCl (p<0.01).

EXPAREL admixed with bupivacaine HCl also achieved a statistically significant reduction in postsurgical opioid consumption through 96 hours (p<0.01) compared with bupivacaine HCl, a key secondary endpoint.

1 unchanged sentence

EXPAREL was well tolerated with a safety profile consistent with bupivacaine HCl.

With these positive results, we plan to submit an sNDA to the FDA early next year seeking expansion of the EXPAREL label to include femoral nerve block in the adductor canal.

With these positive results, we submitted an sNDA to the FDA in January 2023 seeking expansion of the EXPAREL label to include femoral nerve block in the adductor canal and sciatic nerve block in the popliteal fossa, with an anticipated FDA action date under PDUFA of November 13, 2023.

• Pediatrics.

We are working with the FDA to finalize our studies to support expansion of the EXPAREL single-dose infiltration label to include patients under six years of age.

We have met with the FDA to discuss appropriate studies of EXPAREL in pediatric patients aged 0 to less than 6 years of age.

We expect that these studies, if successful, will be the basis for an sNDA seeking expansion of the EXPAREL label to include this patient population for single-dose infiltration.

We are also discussing our regulatory strategy for EXPAREL administered as a nerve block in the pediatric setting.

We are working with both the FDA and the EMA with the goal of harmonizing our pediatric clinical studies between the two regions.

We expect to initiate a Phase 1 pharmacokinetic study after which we would initiate a registration study to support expansion of the EXPAREL single-dose infiltration label to include patients under six years of age.

If successful, we expect this study, followed by a larger Phase 3 study, will support expansion of the EXPAREL labels in the U.S.

We are also discussing with the FDA, EMA and Medicines and Healthcare Products Regulatory Agency (MHRA) our regulatory strategy for EXPAREL administered as a nerve block in the pediatric setting.

• Stellate ganglion block.

5 unchanged sentences

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-operative pain from small- to medium-sized surgical wounds in adults, and in September 2022, we received a positive opinion recommending an expanded indication to include children aged 6 years or older as a field block for treatment of somatic post-operative pain from small- to medium-sized surgical wounds.

In Europe, EXPAREL is approved as a brachial plexus block or femoral nerve block for treatment of post-operative pain in adults and as a field block for treatment of somatic post-operative pain from small- to medium-sized surgical wounds in adults, and in November 2022, we received approval to include children aged 6 years or older as a field block for treatment of somatic post-operative pain from small- to medium-sized surgical wounds.

We launched EXPAREL in the U.K.

and targeted E.U.

countries in the fourth quarter of 2021.

countries in 2021.

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

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

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

In addition, Eurofarma will be responsible for regulatory filings for EXPAREL in these countries, and in December 2022 submitted an application seeking approval in Brazil.

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

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

shortly thereafter.

We market ZILRETTA through our ZILRETTA and iovera° sales force of approximately 50 Treatment Solutions Managers who are providing clinicians with two complementary and standalone non-opioid solutions for managing OA pain.

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 29

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

2 unchanged sentences

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

Pacira BioSciences, Inc.

| Q3 2022 Form 10-Q | Page 35

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

shortly thereafter.

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

ZILRETTA Clinical Benefits

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

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

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

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

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

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

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

2 unchanged sentences

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

The iovera° system is an FDA-approved, non-opioid handheld cryoanalgesia device used to produce precise, controlled doses of cold temperature to targeted nerves.

It has been FDA 510(k) cleared in the U.S., has a CE mark in the E.U.

The iovera° system is a non-opioid handheld cryoanalgesia device used to produce precise, controlled doses of cold temperature to targeted nerves.

It is FDA 510(k) cleared in the U.S., has a CE mark in the E.U.

and is cleared for marketing in Canada for the blocking of pain.

11 unchanged sentences

• Patients in the iovera° group demonstrated a statistically significant reduction in pain scores from their baseline pain scores at 72 hours (p<0.05) and at 12 weeks (p<0.05).

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 30

We believe these data validate iovera° as a clinically meaningful non-opioid alternative for patients undergoing TKA, and that iovera° offers the opportunity to provide patients with non-opioid pain control well in advance of any necessary surgical intervention through a number of key product attributes:

5 unchanged sentences

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

Pacira BioSciences, Inc.

| Q3 2022 Form 10-Q | Page 36

We are also encouraged by usage of iovera° in other areas.

12 unchanged sentences

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

These changes usually develop slowly and get worse over time.

These changes usually develop slowly and worsen over time.

OA can cause pain, stiffness and swelling.

In some cases it also causes reduced function and disability;

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

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

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

In some cases it also causes reduced function and disability—some people are no longer able to do daily tasks or work.

According to the Centers for Disease Control and Prevention, OA affects over 32.5 million adults in the U.S.

The lifetime risk of developing symptomatic knee OA is 45 percent according to the Arthritis Foundation.

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

3 unchanged sentences

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

Pacira BioSciences, Inc.

| Q3 2022 Form 10-Q | Page 37

Clinical Development Programs

PCRX-201 (Formerly FX-201)

PCRX-201 was added to our portfolio as part of the Flexion Acquisition.

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

Based upon very compelling initial Phase 1 efficacy and safety data for PCRX-201, we are working with investigators and plan to request an FDA meeting to discuss the regulatory pathway forward for OA of the knee—a very important and exciting addition to our durable non-opioid pain management pipeline.

PCRX-301 (Formerly FX-301)

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

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

In September 2022, based on the results of a completed phase 1 study, we decided to discontinue further development of PCRX-301 due to a lack of clinical efficacy when compared to placebo and issues with the hydrogel formulation.

PCRX-201 is a novel, IA gene therapy product candidate that produces the anti-inflammatory protein, IL-1Ra, for treating OA pain in the knee.

Based upon compelling initial Phase 1 efficacy and safety data for PCRX-201, we are preparing to initiate a second Phase 1 study in OA of the knee and intend to request a Regenerative Medicine Advanced Therapy, or RMAT, designation.

pMVL-Based Clinical Programs

2 unchanged sentences

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

(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.

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

We are planning to initiate the second half of our Phase 1 study of EXPAREL for intrathecal analgesia in 2023.

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 31

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 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.

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

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

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

The strategic investments we have made to support promising early stage platforms are summarized below:

Company Development Stage Description of Platform Technology Potential Therapeutic Areas

CarthroniX, Inc.

Phase 1-Ready CX-011, an intra-articular injection designed to slow joint degeneration by mediating IL-6 cytokines Knee OA

Genascence Corporation Phase 2-Ready AAV vector-based gene therapy targeting Interleukin 1 Receptor Antagonist (IL-1Ra)

GeneQuine Biotherapeutics GmbH Preclinical Helper-dependent adenoviral vectors (HDAd) that enter joint cells to confer multi-year gene expression

OA and other musculoskeletal disorders

Spine BioPharma, LLC Phase 3 SB01 7-amino acid chain peptide that binds to and induces down regulation of transforming growth factor, beta 1 (TGFβ1)

Degenerative disc disease

Phase 1-Ready CX-011, a small molecule modulator of gp130 formulated as an intra-articular injection designed to slow joint degeneration by mediating IL-6 cytokines Knee OA

Genascence Corporation Phase 1b-Ready Adeno-associated virus (AAV) based gene therapy engineered to deliver Interleukin-1 Receptor Antagonist (IL-1Ra) to target cells in joint(s)

GQ Bio Therapeutics GmbH Preclinical High capacity adenovirus (HCAd) based gene therapy engineered to deliver DNA to target cells in joint(s) and intervertebral disc(s)

Knee OA and degenerative disc disease (DDD)

Spine BioPharma, LLC Phase 3 SB-01, a 7-amino acid chain peptide that binds to and induces down regulation of transforming growth factor, beta 1 (TGFβ1)

Degenerative disc disease (DDD)

Pacira BioSciences, Inc.

2 unchanged sentences

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

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

Pacira Training Facilities

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

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

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

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

Our corporate headquarters are also located at the PITT.

The PITT consists of approximately 13,000 square-feet of fully adaptable space and is equipped with state-of-the-art technology and audio/visual capabilities and features several distinct training spaces including a simulation lab equipped with seven ultrasound scanning stations;

a lecture hall featuring a 4½-foot tall by 24-foot wide liquid crystal display video wall to

We maintain and operate two training facilities—one in Tampa, Florida and one in Houston, Texas.

These sites were constructed with a singular goal in mind:

to advance education on best practice techniques to effectively manage acute pain while reducing or eliminating the need for opioids.

These facilities provide clinicians with flexible, state-of-the-art environments for interactive, hands-on instruction on the latest and most innovative local, regional and field block approaches for managing pain, improving patient care and enabling patient migration to the 23-hour stay environment.

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 33

support live, virtual and even global presentations;

Tampa, Florida

In October 2020, we opened the Pacira Innovation and Training, or PIT, Center of Tampa.

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

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

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

Our principal executive offices and corporate headquarters are also located at the PIT of Tampa.

The PIT of Tampa consists of approximately 13,000 square-feet of fully adaptable space and is equipped with state-of-the-art technology and audio/visual capabilities and features several distinct training spaces including a simulation lab equipped with seven ultrasound scanning stations;

a lecture hall featuring a 4½-foot tall by 24-foot wide liquid crystal display video wall to support live, virtual and even global presentations;

and a green-screen broadcast studio designed to livestream content with single or multiple hosts.

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

In addition to our EXPAREL programs, we are hosting ongoing workshops to train new users on best practice techniques for iovera° administration at the PIT of Tampa.

Led by healthcare professionals, these labs include didactic lectures and hands-on trainings including live model nerve scanning and identification using ultrasound and peripheral nerve stimulation.

At no fee to the organization, the PITT also serves as a venue for national anesthesia provider organizations to host their own workshops and training sessions to educate healthcare providers.

We have launched development plans for a second training facility in Houston, Texas.

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

These training centers are core to developing both our physician champions and community-based clinicians who want to stay on the forefront of opioid-sparing pain management.

We expect to complete this facility before the end of 2022 which would immediately double our capacity and ability to host programs for EXPAREL, ZILRETTA and iovera°.

At no fee to the organization, the PIT of Tampa also serves as a venue for national anesthesia provider organizations to host their own workshops and training sessions to educate healthcare providers.

Houston, Texas

In January 2023, we opened our second training facility, the Houston Pacira Innovation and Training Center, in Houston, Texas.

This 19,000 square-foot state-of-the-art facility features a 125-seat adaptive lecture hall featuring the same liquid crystal display video wall that the PIT of Tampa has, a broadcast studio and both wet and dry lab space for cadaver and other interactive workshops.

A simulation lab is equipped with eight advanced ultrasound machines equipped with artificial intelligence and 3-D training software in addition to professional medical lighting and in-ceiling cameras.

The PIT of Houston is core to developing both our physician champions and community-based clinicians who want to stay on the forefront of opioid-sparing pain management.

With this new training facility, we have doubled our capacity and ability to host programs for EXPAREL, ZILRETTA and iovera°.

Results of Operations

Comparison of the Three and Nine Months Ended September 30, 2022 and 2021

Net product sales consist of (i) EXPAREL in the U.S., the E.U., and the U.K.;

Comparison of the Three Months Ended March 31, 2023 and 2022

Net product sales consist of sales of (i) EXPAREL in the U.S., E.U., and U.K.;

(ii) ZILRETTA in the U.S.;

(iii) iovera° in the U.S., Canada and the E.U.

and (iv) sales of, and royalties on, our bupivacaine liposome injectable suspension for veterinary use.

and (iv) sales of, and royalties on, our bupivacaine liposome injectable suspension primarily for veterinary use.

The following table provides information regarding our revenues during the periods indicated, including percent changes (dollar amounts in thousands):

Three Months Ended

September 30, % Increase / (Decrease) Nine Months Ended

September 30, % Increase / (Decrease)

2022 2021 2022 2021

March 31, % Increase / (Decrease)

Net product sales:

EXPAREL $ 130,408 $ 129,205 1%

26,494 — N/A 77,546 — N/A

ZILRETTA 24,334 23,635 3%

iovera° 4,001 3,026 32%

2 unchanged sentences

Royalty revenue 910 569 60%

Collaborative licensing and milestone revenue — — N/A — 125 (100)%

Total revenues $ 160,341 $ 157,991 1%

(1) ZILRETTA net product sales began November 19, 2021, the date of the Flexion Acquisition.

EXPAREL revenue increased 9% in the three and nine months ended September 30, 2022 versus 2021 primarily due to increases of 7.2% in gross vial volume in both periods and increases of 3.7% and 3.8% in gross selling price per unit, respectively, 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 post-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 $26.5 million and $77.5 million for the three and nine months ended September 30, 2022, respectively.

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 34

Net product sales of iovera° increased 7% in the three months ended September 30, 2022 versus 2021 due to the rollout of generation 2 iovera° products and an increased sales force.

Net product sales of iovera° decreased 5% in the nine months ended September 30, 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 increased over 100% in the three and nine months ended September 30, 2022 versus 2021.

Its related royalties decreased nominally in the three months ended September 30, 2022 and increased 27% in the nine months ended September 30, 2022 versus 2021 primarily due to the timing of orders placed by Aratana Therapeutics, Inc.

EXPAREL revenue increased 1% in the three months ended March 31, 2023 versus 2022 primarily due to increases of 6.2% in gross vial volume and increases of 4.2% in gross selling price per unit, largely offset by an increase of discounting primarily due to the enrollment of EXPAREL in the 340B drug pricing program and other strategic partnerships, as well as the sales mix of EXPAREL vial sizes.

The demand for EXPAREL has increased with ASCs 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 and among those customers that are eligible to participate in the 340B drug pricing program.

While the elective surgery market has faced post-pandemic-related challenges and global economic pressures, EXPAREL utilization remains above the overall decline in elective surgical procedures relative to pre-pandemic baseline levels due to increased utilization in outpatient settings and emergent procedures.

ZILRETTA revenue increased 3% in the three months ended March 31, 2023 versus 2022 primarily due to increases of 2.4% in gross kit volume and increases of 4.0% in gross selling price per unit, partially offset by higher gross to net adjustments primarily due to expanded contracting efforts.

Net product sales of iovera° increased 32% in the three months ended March 31, 2023 versus 2022 due to the rollout of generation 2 iovera° products in the second half of 2022 and an increased sales force.

Bupivacaine liposome injectable suspension net product sales decreased 56% in the three months ended March 31, 2023 versus 2022.

Its related royalties increased 60% in the three months ended March 31, 2023 versus 2022 primarily due to the timing and product mix of orders and related sales made 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 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 nine months ended September 30, 2022 and 2021 (in thousands):

September 30, 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 three months ended March 31, 2023 and 2022 (in thousands):

March 31, 2023 Returns Allowances Prompt Payment Discounts Service

Chargebacks Government Rebates Total

2 unchanged sentences

Payments / Adjustments (328) (2,921) (4,162) (22,689) (396) (30,496)

Balance at September 30, 2022 $ 1,512 $ 1,105 $ 2,925 $ 4,524 $ 742 $ 10,808

September 30, 2021 Returns Allowances Prompt Payment Discounts Service

Balance at March 31, 2023 $ 1,828 $ 1,204 $ 3,308 $ 5,312 $ 802 $ 12,454

March 31, 2022 Returns Allowances Prompt Payment Discounts Service

Chargebacks Government

3 unchanged sentences

Payments / Adjustments (856) (2,608) (4,031) (8,473) (401) (16,369)

Balance at September 30, 2021 $ 1,407 $ 981 $ 999 $ 2,038 $ — $ 5,425

Total reductions of gross product sales from sales-related allowances and accruals were $52.8 million and $23.3 million, or 9.7% and 5.8% of gross product sales, for the nine months ended September 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.

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

Total reductions of gross product sales from sales-related allowances and accruals were $30.6 million and $16.7 million, or 16.2% and 9.7% of gross product sales, for the three months ended March 31, 2023 and 2022, respectively.

The overall 6.5% increase in sales-related allowances and accruals as a percentage of gross product sales was primarily related to accruals as a result of enrolling EXPAREL in the 340B drug pricing program and chargeback-related allowances.

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 35

Cost of Goods Sold

3 unchanged sentences

Three Months Ended

September 30, % Increase / (Decrease) Nine Months Ended

September 30, % Increase / (Decrease)

2022 2021 2022 2021

March 31, % Increase / (Decrease)

Cost of goods sold $ 49,020 $ 36,074 36%

Gross margin 69 % 77 %

Gross margin decreased three percentage points in the three months ended September 30, 2022 versus 2021 primarily due to higher inventory reserves and the ZILRETTA step-up of fixed assets and inventory to fair value in accordance with purchase accounting, partially offset by an increase in gross margin associated with ZILRETTA.

Gross margin decreased two percentage points in the nine months ended September 30, 2022 versus 2021, mainly due to higher inventory reserves and the ZILRETTA step-up of fixed assets and inventory to fair value in accordance with purchase accounting, partially offset by unplanned downtime in the prior period.

Pacira BioSciences, Inc.

| Q3 2022 Form 10-Q | Page 41

Gross margin decreased eight percentage points in the three months ended March 31, 2023 versus 2022, mainly due to EXPAREL inventory reserves, higher product cost sold and discounting resulting in a lower net selling price in the current period.

This decrease was partially offset by fewer ZILRETTA inventory reserves in the first quarter of 2023.

Research and Development Expenses

2 unchanged sentences

Product development and manufacturing capacity expansion expenses include development costs for our products, which include personnel, equipment, materials and contractor costs for process development and product candidates, development costs related to significant scale-ups of our manufacturing capacity and facility costs for our research space.

Regulatory and other expenses include regulatory activities related to unapproved products and indications, medical information expenses and related personnel.

Regulatory and other expenses include regulatory activities related to unapproved products and indications, medical information expenses, registry expenses and related personnel.

Stock-based compensation expense relates to the costs of stock option grants, awards of restricted stock units, or RSUs, and our employee stock purchase plan, or ESPP.

1 unchanged sentence

Three Months Ended

September 30, % Increase / (Decrease) Nine Months Ended

September 30, % Increase / (Decrease)

2022 2021 2022 2021

March 31, % Increase / (Decrease)

Clinical and preclinical development $ 5,261 $ 13,440 (61)%

4 unchanged sentences

% of total revenues 11 % 14 %

Total research and development expense increased 68% in the three and nine months ended September 30, 2022 versus 2021.

Clinical and preclinical development expense increased over 100% in each of the three and nine month periods ended September 30, 2022 versus 2021 due to ongoing expenses and completion of two EXPAREL lower extremity nerve block trials in bunionectomy and TKA, ongoing trials for the product candidates acquired as part of the Flexion Acquisition and toxicology studies for product development candidates.

The prior year periods were affected by the COVID-19 pandemic, whereas the current year includes an expanded product candidate pipeline internally and as a result of the Flexion Acquisition.

Product development and manufacturing capacity expansion expense increased 53% and 23% in the three and nine months ended September 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.

Regulatory and other expense increased 19% in the three months ended September 30, 2022 versus 2021 related to our iovera° clinical data registry.

Regulatory and other expense increased 8% for the nine months ended September 30, 2022 as compared to the same period in 2021 in support of the E.U.

EXPAREL pediatric submission and U.S.

sNDA submission.

Stock-based compensation increased 54% and 33% in the three and nine months ended September 30, 2022 versus 2021, respectively, primarily due to greater equity awards outstanding for research and development personnel.

Total research and development expense decreased 21% in the three months ended March 31, 2023 versus 2022.

Clinical and preclinical development expense decreased 61% in the three months ended March 31, 2023 versus 2022 due to the completion of two EXPAREL lower extremity nerve block trials in bunionectomy and TKA, toxicology studies that are near completion for product candidates and the completion of a trial in the second quarter of 2022 for a former product candidate that was acquired from Flexion.

Product development and manufacturing capacity expansion expense increased 54% in the three months ended March 31, 2023 versus 2022, mainly attributable to the continued scale-up activities of our EXPAREL manufacturing capacity at our Science Center Campus in San Diego, California, as well as new product development costs related to cell and gene therapy, including those in support of PCRX-201.

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 36

Regulatory and other expense increased 36% for the three months ended March 31, 2023 versus 2022 due to increased enrollment and additional sites related to an observational registry study which tracks patients’ symptoms and experience with pain management related to OA of the knee, and increased medical information publications.

Stock-based compensation increased 29% in the three months ended March 31, 2023 versus 2022, respectively, primarily due to greater equity awards outstanding for research and development personnel.

Selling, General and Administrative Expenses

Sales and marketing expenses primarily consist of compensation and benefits for our sales force and personnel that support our sales, marketing, medical and scientific affairs operations, payments to our marketing partners for the promotion and sale of our products, expenses related to communicating the health outcome benefits of our products, investments in provider-level market access and patient reimbursement support and educational programs for our customers.

Sales and marketing expenses primarily consist of compensation and benefits for our sales force and personnel that support our sales, marketing, medical and scientific affairs operations, expenses related to communicating the health outcome benefits of our products, investments in provider-level market access and patient reimbursement support and educational programs for our customers.

General and administrative expenses consist of compensation and benefits for legal, finance, regulatory activities related to approved products and indications, compliance, information technology, human resources, business development, executive management and other supporting personnel.

1 unchanged sentence

Stock-based compensation expense relates to the costs of stock option grants, RSU awards and our ESPP.

Pacira BioSciences, Inc.

| Q3 2022 Form 10-Q | Page 42

The following table provides information regarding our selling, general and administrative expenses during the periods indicated, including percent changes (dollar amounts in thousands):

Three Months Ended

September 30, % Increase / (Decrease) Nine Months Ended

September 30, % Increase / (Decrease)

2022 2021 2022 2021

March 31, % Increase / (Decrease)

Sales and marketing $ 41,579 $ 38,440 8%

3 unchanged sentences

% of total revenues 44 % 41 %

Total selling, general and administrative expense increased 28% and 29% in the three and nine months ended September 30, 2022 versus 2021, respectively

Sales and marketing expenses increased 28% and 33% in the three and nine months ended September 30, 2022 versus 2021, respectively.

The increases were driven by sales force expansion supporting both ZILRETTA and iovera°, following the completion of the Flexion Acquisition in November 2021 and fully staffing a contracted sales force in Europe.

Increases also included expenses for patient reimbursement support for ZILRETTA.

We are continuing our marketing investment in EXPAREL and iovera°, which includes educational initiatives and programs related to the impact of opioids and postsurgical pain management and our national advocacy campaign designed to educate patients about non-opioid treatment options.

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

The addition of ZILRETTA to our commercial portfolio provides clinicians with two unique OA treatment options to individualize patient care.

General and administrative expenses increased 36% and 31% in the three and nine months ended September 30, 2022 versus 2021, respectively.

The increases in the three and nine months ended were driven by administrative support costs as a result of the Flexion Acquisition in November 2021, including transition expenses during integration, legal costs to support intellectual property protection and additional support for our expansion into European markets.

Stock-based compensation increased 15% and 12% in the three and nine months ended September 30, 2022 and 2021 primarily due to an increase in the number of equity awards outstanding for selling, general and administrative personnel.

Total selling, general and administrative expense increased 10% in the three months ended March 31, 2023 versus 2022.

Sales and marketing expense increased 8% in the three months ended March 31, 2023 versus 2022, driven by an increase in sales force staffing and marketing investments in our products.

These include educational initiatives and programs related to the impact of opioids and postsurgical pain management and our national advocacy campaign designed to educate patients about non-opioid treatment options.

We also have invested in strategic partnerships with sports organizations, such as the Ladies Professional Golf Association (LPGA) and National Football League Alumni Association (NFLA), to increase awareness of the availability and benefits of non-opioid options to manage acute and chronic pain for athletes, including postsurgical pain and knee OA.

We also expanded our investment in clinician training in the use of EXPAREL and iovera° at our PIT of Tampa, as well as the opening of our second PIT in Houston, Texas in January 2023.

General and administrative expense increased 20% in the three months ended March 31, 2023 versus 2022.

The increase is primarily driven by legal fees attributable to ongoing litigation.

For more information, see Note 15, Commitments and Contingencies, to our condensed consolidated financial statements included herein.

Stock-based compensation remained flat for the three months ended March 31, 2023 versus 2022.

Amortization of Acquired Intangible Assets

1 unchanged sentence

Three Months Ended

September 30, % Increase / (Decrease) Nine Months Ended

September 30, % Increase / (Decrease)

2022 2021 2022 2021

March 31, % Increase / (Decrease)

Amortization of acquired intangible assets $ 14,322 $ 14,322 —%

Amortization of acquired intangible assets increased substantially in the three and nine months ended September 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.

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 37

As part of the Flexion Acquisition and the MyoScience Acquisition, we acquired intangible assets consisting of developed technology intangible assets and customer relationships, with estimated useful lives between 9 and 14 years.

For more information, see Note 7, Goodwill and Intangible Assets , to our condensed consolidated financial statements included herein.

Acquisition-Related Charges (Gains) 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):

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

Three Months Ended

September 30, % Increase / (Decrease) Nine Months Ended

September 30, % Increase / (Decrease)

2022 2021 2022 2021

Acquisition-related charges (gains), net $ 489 $ (208) N/A $ (13,232) $ (1,189) 100% +

Other — 445 (100)% — 3,445 (100)%

Total acquisition-related charges (gains) and other $ 489 $ 237 100% + $ (13,232) $ 2,256 N/A

Total acquisition-related charges (gains) and other increased over 100% in the three months ended September 30, 2022 versus 2021.

Total acquisition-related charges (gains) and other decreased substantially in the nine months ended September 30, 2022 versus 2021.

During the three months ended September 30, 2022, we recognized acquisition-related charges, net of $0.5 million.

These charges are primarily related to 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.

During the nine months ended September 30, 2022, we recognized acquisition-related gains, net of $13.2 million.

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 those milestones .

These gains were partially offset 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 .

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

In the three and nine months ended September 30, 2021, we recognized acquisition-related charges and other charges of $0.2 million and $2.3 million, respectively.

Included in these three and nine month periods, as part of the MyoScience Acquisition, we recognized acquisition-related gains of $1.2 million and $2.1 million, respectively, related to changes in the fair value of contingent consideration.

These gains were offset by acquisition-related charges of $1.4 million in both the three and nine month periods related to severance and acquisition-related fees.

Also included in the nine months ended September 30, 2021 is a $3.0 million charge related to the termination of an agreement with Nuance Biotech Co.

Ltd to advance the development and commercialization of EXPAREL in China due to the lack of a viable regulatory pathway that adequately safeguards our intellectual property against the risk of a generic product.

See Note 10, Financial Instruments and Note 15, Acquisition-Related Charges and Other, to our condensed consolidated financial statements included herein, for more information.

Other (Expense) Income

March 31, % Increase / (Decrease)

Acquisition-related charges (gains), net $ 12,107 $ 4,337 100% +

Total acquisition-related charges (gains) and other increased over 100% in the three months ended March 31, 2023 versus 2022.

During the three months ended March 31, 2023, we recognized acquisition-related charges, net of $12.1 million.

These charges were primarily related to contingent consideration for the Flexion Acquisition due to a decrease in the assumed discount rate that is utilized in calculating the liability’s present value, based on a significant improvement in our incremental borrowing rate resulting from the March 2023 entry into the TLA Credit Agreement (as defined below) and the related term loan issued (the “TLA Term Loan”) .

For more information, see Note 9, Financial Instruments and Note 14, Acquisition-Related Charges (Gains) and Other , to our condensed consolidated financial statements included herein.

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

These charges were 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.

See Note 14, Acquisition-Related Charges (Gains) and Other, to our condensed consolidated financial statements included herein, for more information.

Other (Expense), Net

The following table provides information regarding other expense, net during the periods indicated, including percent changes (dollar amounts in thousands):

Three Months Ended

September 30, % Increase / (Decrease) Nine Months Ended

September 30, % Increase / (Decrease)

2022 2021 2022 2021

Interest income $ 1,234 $ 177 100% + $ 1,757 816 100% +

March 31, % Increase / (Decrease)

Interest expense $ (9,589) $ (10,246) (6)%

Interest income 3,142 271 100%+

Loss on early extinguishment of debt (16,926) — N/A

Other, net (10) (124) (92)%

Total other expense, net $ (23,383) $ (10,099) 100%+

Total other expense, net increased by more than 100% and 67% in the three and nine months ended September 30, 2022 versus 2021, respectively.

Total other expense, net increased by more than 100% in the three months ended March 31, 2023 versus 2022.

The 6% decrease in interest expense during the three months ended March 31, 2023 was primarily driven by the absence of the 2.375% convertible senior notes that matured in April 2022.

Retiring our term loan B and related credit agreement (the “TLB Term Loan”) is expected to significantly reduce our 2023 full-year interest expense as our new TLA Term Loan carries approximately $140.0 million less principal and an interest rate that is 400 basis points lower than the interest rate applicable under the TLB Term Loan.

The increase in interest income in the three months ended March 31, 2023 versus 2022 was due to higher interest rates and overall investment balances.

In conjunction with the entry into the TLA Credit Agreement (as defined below), we incurred a $16.9 million loss on early extinguishment of debt recognized as a result of the retirement of $287.5 million aggregate principal of our TLB Term Loan.

For more information, see Note 8, Debt , to our condensed consolidated financial statements included herein.

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 38

The 34% and 36% increase in interest expense during the three and nine months ended September 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.

The increase in interest expense was slightly offset by increases in interest income in the three and nine months ended September 30, 2022 versus 2021 due to higher interest rates and overall investment balance.

Other, net expense during the three and nine months ended September 30, 2022 included a $10.0 million impairment related to an equity investment.

Other, net for the nine months ended September 30, 2021 included a realized loss on the sale of an equity investment in the amount of $2.6 million.

Income Tax Expense

The following table provides information regarding our income tax expense during the periods indicated, including percent changes (dollar amounts in thousands):

Income Tax Benefit (Expense)

The following table provides information regarding our income tax benefit (expense) during the periods indicated, including percent changes (dollar amounts in thousands):

Three Months Ended

September 30, % Increase / (Decrease) Nine Months Ended

September 30, % Increase / (Decrease)

2022 2021 2022 2021

Income tax expense $ 2,762 $ 6,571 (58)% $ 5,359 $ 15,492 (65)%

March 31, % Increase / (Decrease)

Income tax benefit (expense) $ 6,938 $ (466) N/A

Effective tax rate 26 % 6 %

The effective tax rates were 133% and 27% for the three months ended September 30, 2022 and September 30, 2021, respectively.

The effective tax rates were 17% and 25% for the nine months ended September 30, 2022 and September 30, 2021, respectively.

The effective tax rates were 26% and 6% for the three months ended March 31, 2023 and March 31, 2022, 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 months ended September 30, 2022 and September 30, 2021 include non-deductible executive compensation and valuation allowances recorded against non-U.S.

results and capital losses.

The three months ended September 30, 2022 also includes benefits for 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.

The effective tax rates for the nine months ended September 30, 2022 and September 30, 2021 include non-deductible executive compensation and valuation allowances recorded against non-U.S.

results and capital losses offset by benefits related to stock-based compensation.

The nine months ended September 30, 2022 also includes benefits for a first quarter Skyepharma milestone payment and a fair value adjustment for Flexion contingent consideration.

The effective tax rate for the three months ended March 31, 2023 includes costs for a fair value adjustment to Flexion contingent consideration, and a valuation allowance recorded against non-U.S.

results, offset by tax credits and stock-based compensation benefits.

The effective tax rate for the three months ended March 31, 2022 includes benefits related to equity compensation, a Skyepharma milestone payment and a valuation allowance recorded against non-U.S.

Liquidity and Capital Resources

3 unchanged sentences

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 September 30, 2022, we had an accumulated deficit of $138.6 million, cash and cash equivalents and available-for-sale investments of $346.1 million and working capital of $401.9 million.

As of March 31, 2023, we had an accumulated deficit of $168.3 million, cash and cash equivalents and available-for-sale investments of $182.3 million and working capital of $277.4 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.

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.

The remaining $1.4 million is due by December 31, 2022.

Pacira BioSciences, Inc.

| Q3 2022 Form 10-Q | Page 45

Summary of Cash Flows

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

Nine Months Ended

September 30,

Three Months Ended

Condensed Consolidated Statements of Cash Flows Data:

3 unchanged sentences

Financing activities (153,905) (181,585)

Net (decrease) increase in cash and cash equivalents $ (476,154) $ 34,079

Net decrease in cash and cash equivalents $ (68,594) $ (358,827)

Operating Activities

During the nine months ended September 30, 2022, net cash provided by operating activities was $103.2 million, compared to $102.5 million during the nine months ended September 30, 2021.

The increase of $0.7 million was attributable to increased net product sales from both ZILRETTA, acquired as part of the Flexion Acquisition in November 2021, and EXPAREL, offset by increases in all operating expense lines to support the existing and newly acquired products and product candidates, a slightly lower gross margin and increased interest payments.

During the three months ended March 31, 2023, net cash provided by operating activities was $19.1 million, compared to $30.8 million during the three months ended March 31, 2022.

The decrease of $11.6 million was attributable to the payment of a $13.0 million termination fee relating to a licensing agreement and lower gross margin, partially offset by increased interest income.

Investing Activities

During the nine months ended September 30, 2022, net cash used in investing activities was $236.4 million, which reflected $166.8 million of 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 $24.6 million for fill lines for our products and equipment for an EXPAREL capacity expansion project at our Science Center Campus in San Diego, California and purchases of equity and debt investments of $13.0 million.

During the nine months ended September 30, 2021, net cash used in investing activities was $87.7 million, which reflected $42.9 million of short-term and noncurrent available-for-sale investment purchases (net of maturities) and purchases of fixed assets of $36.7 million.

Major fixed asset purchases included equipment for an 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 partnership with Thermo Fisher Scientific Services, Inc., or Thermo Fisher.

In addition, we made $13.0 million in equity investments, and also purchased a total of $4.2 million in convertible notes.

Further, we sold an equity investment for net cash proceeds of $9.1 million.

Financing Activities

During the nine months ended September 30, 2022, net cash used in financing activities was $343.0 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 $18.8 million of scheduled repayments of Term Loan principal, partially offset by $23.5 million of proceeds from the exercise of stock options and $1.8 million from the issuance of common stock through our ESPP.

During the nine months ended September 30, 2021, net cash provided by financing activities was $19.3 million, which consisted of proceeds from the exercise of stock options of $19.0 million and $1.6 million from the issuance of common stock through our ESPP, partially offset by the $1.3 million financing component of a $7.0 million contingent consideration payment made to MyoScience securityholders.

During the three months ended March 31, 2023, net cash provided by investing activities was $66.2 million, which reflected proceeds from $76.7 million of available-for-sale investment sales (net of purchases), partially offset by purchases of fixed assets of $6.6 million for fill lines for our products and equipment for an EXPAREL capacity expansion project at our Science Center Campus in San Diego, California and purchases of equity and debt investments of $4.0 million.

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 39

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.

Financing Activities

During the three months ended March 31, 2023, net cash used in financing activities was $153.9 million, which primarily consisted of a $296.9 million repayment of TLB Term Loan principal as well as a $5.8 million prepayment penalty, partially offset by the net proceeds from the TLA Term Loan of $149.6 million.

See Note 8, Debt , to our condensed consolidated financial statements included herein for further discussion.

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.

2028 Term Loan A Facility

On March 2023, we entered into a credit agreement (the “TLA Credit Agreement”) to refinance the indebtedness outstanding under the Company’s TLB Credit Agreement (as defined and discussed below).

The term loan issued under the TLA Credit Agreement (the “TLA Term Loan”) was issued at a 0.30% discount and provides for a single-advance term loan A facility in the principal amount of $150.0 million, which is secured by substantially all of our and any subsidiary guarantor’s assets.

We may elect to borrow either (i) alternate base rate borrowings or (ii) term benchmark borrowings or daily simple SOFR (as defined in the TLA Credit Agreement) borrowings.

Each term loan borrowing which is an alternate base rate borrowing bears interest at a rate per annum equal to (i) the Alternate Base Rate (as defined in the TLA Credit Agreement), plus (ii) a spread based on our Senior Secured Net Leverage Ratio ranging from 2.00% to 2.75%.

Each term loan borrowing which is a term benchmark borrowing or daily simple SOFR borrowing bears interest at a rate per annum equal to (i) the Adjusted Term SOFR Rate or Adjusted Daily Simple SOFR (as each is defined in the TLA Credit Agreement), plus (ii) a spread based on our Senior Secured Net Leverage Ratio ranging from 3.00% to 3.75%.

As of March 31, 2023, borrowings under the TLA Term Loan consisted entirely of term benchmark borrowings at a rate of 7.97%.

The TLA Credit Agreement requires us to, among other things, maintain (i) a Senior Secured Net Leverage Ratio (as defined in the Credit Agreement), determined as of the last day of each fiscal quarter, of no greater than 3.00 to 1.00 and (ii) a Fixed Charge Coverage Ratio (as defined in the TLA Credit Agreement), determined as of the last day of each fiscal quarter, of no less than 1.50 to 1.00.

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

As of March 31, 2023, we were in compliance with all financial covenants under the TLA Credit Agreement.

See Note 8, Debt , to our condensed consolidated financial statements included herein for further discussion.

Term Loan B Facility

In December 2021, we entered into the $375.0 million Term Loan which is secured by substantially all of our and any subsidiary guarantor’s assets and is scheduled to mature on December 7, 2026, subject to certain exceptions set forth in the term loan credit agreement (the “Credit Agreement”).

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

Each term loan borrowing which is an alternate base rate borrowing bears interest at a variable rate per annum equal to the Alternate Base Rate (as defined in the Credit Agreement) subject to a 1.75% floor, plus 6.00%.

Each term loan borrowing which is a term benchmark borrowing bears interest at a variable rate per annum equal to (i) the Adjusted Term SOFR Rate (as defined in the Credit Agreement) subject to a 0.75% floor plus (ii) 7.00%.

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

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

During the nine months ended September 30, 2022, we made scheduled principal payments of $18.8 million.

At September 30, 2022, we had $356.3 million in outstanding borrowings under the Term Loan.

As a result of our entry into the Term Loan, our interest expense has increased in 2022.

In December 2021, we entered into the $375.0 million TLB Term Loan which was secured by substantially all of our and any subsidiary guarantor’s assets and was scheduled to mature on December 7, 2026, subject to certain exceptions set forth in the TLB Credit Agreement.

On March 31, 2023, we used the $149.6 million of net borrowings under the TLA Credit Agreement and cash on hand to repay the indebtedness outstanding under the TLB Credit Agreement and concurrently terminated the TLB Credit Agreement.

We incurred a prepayment fee of 2.00% of the outstanding principal balance of the TLB Term Loan in connection with the termination.

During the three months ended March 31, 2023, we made a scheduled principal payment of $9.4 million and repaid the outstanding $287.5 million principal on the TLB Term Loan, which resulted in a $16.9 million loss on early extinguishment of debt.

See Note 8, Debt , to our condensed consolidated financial statements included herein for further discussion.

1 unchanged sentence

In July 2020, we completed a private placement of $402.5 million in aggregate principal amount of our 0.750% convertible senior notes due 2025, or 2025 Notes, and entered into an indenture with respect to the 2025 Notes.

The 2025 Notes accrue interest at a fixed rate of 0.750% per annum, payable semiannually in arrears on February 1 and August 1 of each year.

The 2025 Notes accrue interest at a fixed rate of 0.750% per annum, payable semiannually in arrears on February 1 st and August 1 st of each year.

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 40

The 2025 Notes mature on August 1, 2025.

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

At March 31, 2023, the outstanding principal on the 2025 Notes was $402.5 million.

See Note 8, Debt , to our condensed consolidated financial statements included herein for further discussion.

1 unchanged sentence

In November 2021, as part of the Flexion Acquisition, we assumed $201.3 million in aggregate principal amount of the Flexion 2024 Notes.

The Flexion 2024 Notes have a maturity date of May 1, 2024, are unsecured, and accrue interest at a rate of 3.375% per annum, payable semi-annually on May 1 and November 1 of each year.

The Flexion 2024 Notes have a maturity date of May 1, 2024, are unsecured, and accrue interest at a rate of 3.375% per annum, payable semi-annually on May 1 st and November 1 st of each year.

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

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

At March 31, 2023, the outstanding principal on the Flexion 2024 Notes was $8.6 million.

See Note 8, 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 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:

• the costs of successfully integrating Flexion into our existing business and expanding the commercialization of ZILRETTA;

• the cost and timing of the potential Flexion milestone payments in connection with the Flexion Acquisition, which could be up to an aggregate of $425.5 million if certain regulatory and commercial milestones are met.

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

• 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, the inability to secure a sufficient supply of materials or the inflationary impact on the cost 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.

| Q3 2022 Form 10-Q | Page 47

• 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;

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 TLA Term Loan, our Notes (including 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 cost and timing of the potential milestone payments to former Flexion stockholders, which could be up to an aggregate of $372.3 million if certain regulatory and commercial milestones are met.

See Note 9, Financial Instruments , to our condensed consolidated financial statements included herein for more information;

• the cost and timing of potential remaining milestone payments to former MyoScience security holders, which could be up to an aggregate of $43.0 million if certain regulatory and commercial milestones are met.

See Note 9, Financial Instruments , to our condensed consolidated financial statements included herein for more information;

• the impact of global economic conditions—including the impact of inflation—on our product and material costs, supply chain, longer lead-times, an inability to secure a sufficient supply of materials, our operating expenses and our business strategy;

• the timing of and extent to which the holders of our Notes elect to convert their Notes, the timing of principal and interest payments on our TLA Term Loan and the timing and impact of increases to the variable interest rate on our TLA Term Loan borrowings in accordance with the terms of the TLA 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 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);

• 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 (which we expect to submit an sNDA for in the second half of 2023) and a ZILRETTA capital project at the Thermo Fisher site in Swindon, England;

• the cost and timing of additional strategic investments, including additional investments under existing agreements;

• 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;

• the costs related to legal and regulatory matters;

• 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 the approval of EXPAREL;

• the costs for the development and commercialization of other product candidates;

3 unchanged sentences

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

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

In particular, capital market disruptions or negative economic conditions may hinder our access to capital.

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 41

Critical Accounting Estimates

See Note 2, Summary of Significant Accounting Policies , to our condensed consolidated financial statements included herein for a discussion of recently issued accounting pronouncements and their impact or future potential impact on our financial results, if determinable.

For a description of critical accounting policies that affect our significant judgments and estimates used in the preparation of our consolidated financial statements, refer to our most recent Annual Report on Form 10-K for the year ended December 31, 2022 .

There have been no significant changes to our critical accounting policies nor any recently issued accounting pronouncements that are expected to have a material impact on our financial results since December 31, 2022.

Contractual Obligations

Except for a new lease described in Note 7, Leases , to our condensed consolidated financial statements included herein, there have been no material changes in our contractual obligations relating to our indebtedness, lease obligations and purchase obligations from those reported in our Annual Report on Form 10-K for the year ended December 31, 2021.

Except for entry into the new TLA Credit Agreement and termination of the TLB Credit Agreement as described in Note 8, Debt , to our condensed consolidated financial statements included herein, there have been no material changes in our contractual obligations relating to our indebtedness, lease obligations and purchase obligations from those reported in our Annual Report on Form 10-K for the year ended December 31, 2022.

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, 2022 .

Pacira BioSciences, Inc.

| Q3 2022 Form 10-Q | Page 48

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