What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-08-02 compared with 2023-05-03 · 383 added, 274 removed, 978 unchanged (40% of the section changed)

24 unchanged sentences

Lease liabilities 8,981 9,121

Current portion of convertible senior notes, net 8,641 —

Current portion of long-term debt, net 10,863 33,648

10 unchanged sentences

5,000,000 shares authorized;

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

none issued and outstanding at June 30, 2023 and December 31, 2022

Common stock, par value $ 0.001 ;

250,000,000 shares authorized;

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

46,408,961 and 45,927,790 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively

Additional paid-in capital 950,626 924,095

10 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Net product sales $ 169,467 $ 168,581 $ 328,898 $ 326,003

6 unchanged sentences

Amortization of acquired intangible assets 14,322 14,322 28,644 28,644

Acquisition-related charges (gains) and other 12,107 4,337

Acquisition-related (gains) charges, restructuring charges and other ( 16,613 ) ( 18,058 ) ( 4,506 ) ( 13,721 )

Total operating expenses 129,590 138,176 293,022 278,774

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

Income from operations 39,877 31,235 36,786 48,628

Other (expense) income:

4 unchanged sentences

Total other expense, net ( 2,023 ) ( 9,228 ) ( 25,406 ) ( 19,327 )

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

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

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

Net (loss) income per share:

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

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

Income before income taxes 37,854 22,007 11,380 29,301

Income tax expense ( 12,091 ) ( 2,131 ) ( 5,153 ) ( 2,597 )

Net income $ 25,763 $ 19,876 $ 6,227 $ 26,704

Net income per share:

Basic net income per common share $ 0.56 $ 0.44 $ 0.14 $ 0.59

Diluted net income per common share $ 0.51 $ 0.40 $ 0.13 $ 0.55

Weighted average common shares outstanding:

5 unchanged sentences

PACIRA BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

Three Months Ended

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

June 30, Six Months Ended

2023 2022 2023 2022

Net income $ 25,763 $ 19,876 $ 6,227 $ 26,704

Other comprehensive income (loss):

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

Net unrealized (loss) gain on investments, net of tax ( 35 ) ( 160 ) 216 ( 893 )

Foreign currency translation adjustments ( 1 ) 82 ( 9 ) 121

Total other comprehensive income (loss) 243 ( 694 )

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

Total other comprehensive (loss) income ( 36 ) ( 78 ) 207 ( 772 )

Comprehensive income $ 25,727 $ 19,798 $ 6,434 $ 25,932

See accompanying notes to condensed consolidated financial statements.

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

FOR THE THREE MONTHS ENDED JUNE 30, 2023 AND 2022

(In thousands)

3 unchanged sentences

Shares Amount Total

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

Exercise of stock options 50 — 1,580 — — 1,580

Vested restricted stock units 339 — — — — —

Common stock issued under employee stock

purchase plan 50 — 1,672 — — 1,672

Stock-based compensation — — 10,955 — — 10,955

Other comprehensive loss (Note 10) — — — — ( 36 ) ( 36 )

Net income — — — 25,763 — 25,763

Balance at June 30, 2023 46,409 $ 46 $ 950,626 $ ( 142,524 ) $ ( 173 ) $ 807,975

Common Stock Additional

Capital Accumulated

Deficit Accumulated Other Comprehensive Loss

Shares Amount Total

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

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

Vested restricted stock units 292 — — — — —

Common stock issued under employee stock

purchase plan 37 — 1,821 — — 1,821

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

Issuance of common stock upon conversion of 2022 convertible senior notes 102 — 3,040 — — 3,040

Other comprehensive loss (Note 10) — — — — ( 78 ) ( 78 )

Net income — — — 19,876 — 19,876

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

See accompanying notes to condensed consolidated financial statements.

Pacira BioSciences, Inc.

| Q2 2023 Form 10-Q | Page 7

PACIRA BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(In thousands)

Common Stock Additional

Capital Accumulated

Deficit Accumulated Other Comprehensive Loss

Shares Amount Total

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

1 unchanged sentence

Vested restricted stock units 369 — — — — —

Common stock issued under employee stock

purchase plan 50 — 1,672 — — 1,672

Stock-based compensation — — 22,945 — — 22,945

Other comprehensive income (Note 10) — — — — 207 207

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

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

Net income — — — 6,227 — 6,227

Balance at June 30, 2023 46,409 $ 46 $ 950,626 $ ( 142,524 ) $ ( 173 ) $ 807,975

Common Stock Additional

7 unchanged sentences

Vested restricted stock units 299 — — — — —

Common stock issued under employee stock

purchase plan 37 — 1,821 — — 1,821

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

Issuance of common stock upon conversion of 2022 convertible senior notes 102 — 3,040 — — 3,040

Other comprehensive loss (Note 10) — — — — ( 772 ) ( 772 )

Net income — — — 26,704 — 26,704

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

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

(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.

6 unchanged sentences

(In thousands)

Three Months Ended

Six Months Ended

Operating activities:

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

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

Net income $ 6,227 $ 26,704

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

Deferred taxes 4,100 2,193

6 unchanged sentences

Changes in contingent consideration ( 6,640 ) ( 22,351 )

(Gain) loss on investment ( 23 ) 18

Loss on investment 11 108

Changes in operating assets and liabilities:

15 unchanged sentences

Proceeds from exercises of stock options 1,913 21,881

Proceeds from shares issued under employee stock purchase plan 1,673 1,821

Proceeds from Term loan A facility 149,550 —

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

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

Repayment of Term loan B facility ( 296,875 ) ( 9,375 )

Repayment of Term loan A facility ( 2,813 ) —

Debt extinguishment costs ( 5,750 ) —

8 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 $ 2,388 $ 2,454

6 unchanged sentences

Pacira BioSciences, Inc.

and its subsidiaries (collectively, the “Company” or “Pacira”) is the industry leader in its commitment to non-opioid pain management and providing a non-opioid option to as many patients as possible to redefine the role of opioids as rescue therapy only.

and its subsidiaries (collectively, the “Company” or “Pacira”) is the industry leader in its commitment to non-opioid pain management and providing non-opioid pain management options to as many patients as possible to redefine the role of opioids as rescue therapy only.

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

13 unchanged sentences

Pursuant to these rules and regulations, certain information and footnote disclosures normally included in complete annual financial statements have been condensed or omitted.

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 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.

The condensed consolidated financial statements at June 30, 2023, and for the three and six-month periods ended June 30, 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 2022 Annual Report.

The condensed consolidated financial statements as presented reflect certain reclassifications from previously issued financial statements to conform to the current year presentation.

14 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Largest wholesaler 33 % 32 % 32 % 31 %

7 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 primarily for veterinary use.

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

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

Royalty revenues are related to a collaborative licensing agreement from the sale of its bupivacaine liposome injectable suspension primarily for veterinary use.

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

37 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Net product sales:

6 unchanged sentences

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

March 31, December 31,

June 30, December 31,

Raw materials $ 46,489 $ 39,810

6 unchanged sentences

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

March 31, December 31,

June 30, December 31,

Machinery and equipment $ 120,750 $ 118,684

6 unchanged sentences

Fixed assets, net $ 180,310 $ 183,512

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.

For the three months ended June 30, 2023 and 2022, depreciation expense was $ 4.7 million and $ 6.5 million, respectively.

For the three months ended June 30, 2023 and 2022, there was $ 0.7 million and $ 1.0 million of capitalized interest on the construction of manufacturing sites, respectively.

For the six months ended June 30, 2023 and 2022, depreciation expense was $ 10.0 million and $ 12.2 million, respectively.

For the six months ended June 30, 2023 and 2022, there was $ 2.1 million and $ 1.8 million of capitalized interest on the construction of manufacturing sites, respectively.

At June 30, 2023 and December 31, 2022, total fixed assets, net includes manufacturing process equipment and leasehold improvements located in Europe in the amount of $ 40.6 million and $ 44.7 million, respectively.

As of June 30, 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

2 unchanged sentences

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

Since July 2022 and February 2023, the Company has been recognizing sublease income for laboratory space leased in Woburn, Massachusetts and a portion of office space leased in Burlington, Massachusetts, respectively, from leases that were assumed as part of the Flexion Acquisition.

Subsequent to June 30, 2023, the Company partially exited its Burlington, Massachusetts office space lease that had been assumed as part of the Flexion Acquisition at a one-time termination fee of $ 0.8 million, which released its obligation of $ 1.6 million in future cash payments for the respective proportion of square footage exited.

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

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

Fixed lease costs $ 3,631 $ 3,542 $ 7,259 $ 7,069

2 unchanged sentences

Total $ 3,840 $ 4,050 $ 7,882 $ 8,049

Pacira BioSciences, Inc.

| Q2 2023 Form 10-Q | Page 13

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

Three Months Ended

Six Months Ended

Cash paid for operating lease liabilities, net of lease incentives $ 7,325 $ 6,637

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.

4 unchanged sentences

Year Aggregate Minimum

2023 (remaining nine months) $ 10,263

2023 (remaining six months) $ 6,925

Thereafter 27,350

2 unchanged sentences

Total operating lease liabilities $ 69,027

Pacira BioSciences, Inc.

| Q2 2023 Form 10-Q | Page 14

NOTE 7— GOODWILL AND INTANGIBLE ASSETS

1 unchanged sentence

(the Company’s California operating subsidiary) from SkyePharma Holding, Inc., or Skyepharma, (now a subsidiary of Vectura Group plc) in 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 balance at each of June 30, 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, 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

June 30, 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 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.

Amortization expense on intangible assets was $ 14.3 million for both the three months ended June 30, 2023 and 2022.

Amortization expense on intangible assets was $ 28.6 million for both the six months ended June 30, 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 $ 28.6 million for the remaining six 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.

Pacira BioSciences, Inc.

| Q2 2023 Form 10-Q | Page 15

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

March 31, December 31,

June 30, December 31,

Term loan A facility maturing March 2028 $ 145,686 $ —

10 unchanged sentences

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

Term loan A facility maturing March 2028 $ 147,188

Deferred financing costs ( 1,079 )

1 unchanged sentence

Total debt, net of debt discount and deferred financing costs $ 145,686

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 Term Loan matures on March 31, 2028 and requires quarterly repayments of principal in the amount of $ 2.8 million which commenced on 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 is required to make two more quarterly principal payments totaling $ 5.6 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.

As of June 30, 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.

1 unchanged sentence

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 %.

During the six months ended June 30, 2023, the Company made a scheduled principal payment of $ 2.8 million.

As of June 30, 2023, borrowings under the TLA Term Loan consisted entirely of term benchmark borrowings at a rate of 8.01 %.

Subsequent to June 30, 2023, the Company made a $ 25.0 million principal prepayment in July 2023.

Pacira BioSciences, Inc.

| Q2 2023 Form 10-Q | Page 16

2026 Term Loan B Facility

5 unchanged sentences

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

June 30, December 31,

Term loan B facility maturing December 2026 $ — $ 296,875

Deferred financing costs — ( 3,919 )

1 unchanged sentence

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

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.

During the six months ended June 30, 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

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

2 unchanged sentences

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

March 31, December 31,

June 30, December 31,

0.750 % convertible senior notes due August 2025

5 unchanged sentences

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.

During the quarter ended June 30, 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.

1 unchanged sentence

For both the principal and excess conversion value, holders may receive cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s option.

The initial conversion rate for the 2025 Notes is 13.9324 shares of common stock per $1,000 principal amount, which is equivalent to an initial conversion price of $ 71.78 per share of the Company’s common stock.

The initial conversion rate for the 2025 Notes is 13.9324 shares of common stock per $1,000

Pacira BioSciences, Inc.

| Q2 2023 Form 10-Q | Page 17

principal amount, which is equivalent to an initial conversion price of $ 71.78 per share of the Company’s common stock.

The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest.

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

As of March 31, 2023, the 2025 Notes had a market price o f $926 pe r $1,000 principal amount.

As of June 30, 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.

1 unchanged sentence

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

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

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.

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

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

1 unchanged sentence

No sinking fund is provided for the 2025 Notes.

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

While the 2025 Notes are currently classified on the Company’s condensed consolidated balance sheet at June 30, 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 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.

9 unchanged sentences

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

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

At June 30, 2023, the remaining principal outstanding is $ 8.6 million.

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, and entered into an indenture with respect to the 2022 Notes.

On April 1, 2022, the 2022 Notes matured and the Company settled the remaining outstanding principal balance of $ 160.0 million and a

Pacira BioSciences, Inc.

| Q2 2023 Form 10-Q | Page 18

conversion premium of $ 4.8 million through a cash payment of $ 156.9 million and the issuance of 101,521 shares of the Company’s common stock, which increased additional paid-in capital by $ 3.0 million.

Interest Expense

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Contractual interest expense $ 3,849 $ 8,196 $ 13,199 $ 17,381

15 unchanged sentences

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

Pacira BioSciences, Inc.

| Q1 2023 Form 10-Q | Page 17

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

2 unchanged sentences

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):

Pacira BioSciences, Inc.

| Q2 2023 Form 10-Q | Page 19

At June 30, 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

12 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 $ 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.

(1) The closing price of the Company’s common stock as reported on the Nasdaq Global Select Market was $ 40.07 per share at June 30, 2023 compared to a conversion price of $ 71.78 per share.

At June 30, 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.

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Foreign currency adjustments — ( 11 ) ( 11 )

Balance at March 31, 2023

Balance at June 30, 2023

$ 15,877 $ 12,062 $ 27,939

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 .

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The Company has recognized contingent consideration related to the Flexion Acquisition and the MyoScience Acquisition in the amount of $ 21.5 million and $ 28.1 million as of June 30, 2023 and December 31, 2022, respectively.

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

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.

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

In November 2021, 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.

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In November 2021, the Company completed the Flexion Acquisition, which provided for contingent consideration related to contingent value rights 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.

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.

During the three and six months ended June 30, 2023, the Company recorded gains of $ 18.3 million and $ 6.6 million, respectively, due to adjustments to long-term forecasts which reduced the probability of meeting the sales-based contingent consideration milestones by December 31, 2030, the expiration date for achieving the milestones.

The gains recognized during the six months ended June 30, 2023 were partially offset by 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 TLA Credit Agreement entered into in March 2023.

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

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

At June 30, 2023, the weighted average discount rate was 10.2 % and the probability of payment for the achievement of the remaining regulatory milestone by the expiration date was 12.5 %.

As of June 30, 2023 and December 31, 2022, a contingent consideration liability related to the Flexion Acquisition was recognized in the amount of $ 21.5 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 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.

As of June 30, 2023, the maximum potential remaining milestone payments to be paid are $ 43.0 million.

At June 30, 2023, the probability of success for the regulatory milestone that has not yet been met was assessed as zero .

As of June 30, 2023 and December 31, 2022, a contingent consideration liability related to the MyoScience Acquisition has been assessed as zero .

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

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

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Utilized as of

March 31, 2023

June 30, 2023

Discount rates 9.4 % to 11.0 %

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Fair value adjustments and accretion ( 6,640 )

Balance at March 31, 2023

Balance at June 30, 2023

Available-for-Sale Investments

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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

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

At June 30, 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,

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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.

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.

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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

The following summarizes the Company’s short-term and noncurrent available-for-sale investments at June 30, 2023 and December 31, 2022 (in thousands):

June 30, 2023 Investments

Losses Fair Value

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government bonds 14,697 — ( 80 ) 14,617

Subtotal 138,933 2 ( 481 ) 138,454

federal agency bonds 3,503 10 — 3,513

government bonds 4,762 6 — 4,768

Subtotal 8,265 16 — 8,281

Total $ 134,465 $ — $ ( 509 ) $ 133,956

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

At March 31, 2023, there were no investments available for sale that were materially less than their amortized cost.

At June 30, 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 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.

At June 30, 2023 and December 31, 2022, the interest receivable from its available-for-sale investments recognized in prepaid expenses and other current assets was $ 0.9 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.

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Such amounts may exceed federally-insured limits.

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

As of June 30, 2023, three wholesalers each accounted for over 10% of the Company’s accounts receivable, at 36 %, 21 % and 15 %.

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

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Accounting Policies .

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.

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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.

As of June 30, 2023 and December 31, 2022, the Company did no t deem any allowances for credit losses on its accounts receivable necessary.

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NOTE 10— STOCKHOLDERS’ EQUITY

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Foreign currency translation adjustments — ( 9 ) ( 9 )

Balance at March 31, 2023

Balance at June 30, 2023

$ ( 307 ) $ 134 $ ( 173 )

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Foreign currency translation adjustments — 121 121

Balance at March 31, 2022

Balance at June 30, 2022

$ ( 754 ) $ 149 $ ( 605 )

(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.

(1) Net of a $ 0.2 million tax expense and $ 0.3 million tax benefit for the six months ended June 30, 2023 and 2022, respectively.

NOTE 11— STOCK PLANS

Stock Incentive Plans

The Company’s Amended and Restated 2011 Stock Incentive Plan, or 2011 Plan, was originally adopted by its board of directors and approved by its stockholders in June 2011 and was amended and restated in June 2014, June 2016, June 2019, June 2021 and June 2023.

In June 2023, the Company’s stockholders approved the amendment and restatement which increased the number of shares of common stock authorized for issuance as equity awards under the 2011 Plan by 3,300,000 shares.

The 2011 Plan allows the granting of incentive stock options, non-statutory stock options, restricted stock units and other stock-based awards.

Stock-Based Compensation

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Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Cost of goods sold $ 1,436 $ 1,478 $ 3,160 $ 2,830

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Equity Awards

The following tables contain information about the Company’s stock option and restricted stock unit, or RSU, activity for the three months ended March 31, 2023:

The following tables contain information about the Company’s stock option and restricted stock unit, or RSU, activity for the six months ended June 30, 2023:

Stock Options Number of

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Expired ( 88,438 ) 55.06

Outstanding at March 31, 2023

Outstanding at June 30, 2023

7,442,076 49.91

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Forfeited ( 95,349 ) 58.56

Unvested at March 31, 2023

Unvested at June 30, 2023

1,445,234 48.27

The weighted average fair value of stock options granted during the three months ended March 31, 2023 wa s $ 16.78 per share.

The weighted average fair value of stock options granted during the six months ended June 30, 2023 wa s $ 16.22 per share.

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

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

Black-Scholes Weighted Average Assumption Six Months Ended June 30, 2023

Expected dividend yield None

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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 lesser.

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

During the six months ended June 30, 2023, 50,634 shares were purchased and issued through the ESPP.

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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.

NOTE 12— NET INCOME PER SHARE

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

Diluted net income per common share is calculated by dividing the net 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.

Potential common shares associated with convertible notes are treated under the if-converted method, adjustments are made to the diluted net 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.

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):

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

The following table sets forth the computation of basic and diluted net income per common share for the three and six mon ths ended June 30, 2023 and 2022 (in thousands, except per share amounts):

Three Months Ended

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

June 30, Six Months Ended

2023 2022 2023 2022

Net income—basic $ 25,763 $ 19,876 $ 6,227 $ 26,704

ASU 2020-06 convertible notes if-converted method adjustment 1,029 1,039 — 2,078

Adjusted net income—diluted $ 26,792 $ 20,915 $ 6,227 $ 28,782

Weighted average common shares outstanding—basic 46,088 45,501 46,019 45,185

Computation of diluted securities:

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

Dilutive effect of stock options 108 1,016 92 1,106

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Weighted average common shares outstanding—diluted 52,054 52,478 46,285 52,262

Net (loss) income per share:

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

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

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):

Net income per share:

Basic net income per common share $ 0.56 $ 0.44 $ 0.14 $ 0.59

Diluted net income per common share $ 0.51 $ 0.40 $ 0.13 $ 0.55

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

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Weighted average number of stock options 5,404 1,948 5,403 1,855

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Weighted average number of RSUs 701 31 759 24

Weighted average ESPP purchase options 55 —

Total 6,105 1,979 11,769 3,075

For the six months ended June 30, 2023, the antidilutive impact associated with the convertible senior notes would have included an interest expense add-back to net income of $ 2.1 million.

Pacira BioSciences, Inc.

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NOTE 13— INCOME TAXES

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

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

Three Months Ended

(Loss) income before income taxes:

June 30, Six Months Ended

2023 2022 2023 2022

Income (loss) before income taxes:

Domestic $ 40,189 $ 23,798 $ 12,416 $ 30,380

Foreign ( 2,335 ) ( 1,791 ) ( 1,036 ) ( 1,079 )

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

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

Total income before income taxes $ 37,854 $ 22,007 $ 11,380 $ 29,301

Income tax expense $ 12,091 $ 2,131 $ 5,153 $ 2,597

Effective tax rate 32 % 10 % 45 % 9 %

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 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 months ended March 31, 2023 and 2022 summarized below (in thousands):

The Company’s effective tax rates for the three and six months ended June 30, 2023 includes costs related to non-deductible stock-based compensation, a valuation allowance recorded against non-U.S.

results and non-deductible executive compensation.

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

NOTE 14— ACQUISITION-RELATED (GAINS) CHARGES, RESTRUCTURING CHARGES AND OTHER

Acquisition-related (gains) charges, restructuring charges and other for the three and six months ended June 30, 2023 and 2022 summarized below (in thousands):

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

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

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MyoScience contingent consideration — ( 8,757 ) — ( 9,034 )

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

Restructuring charges 936 — 936 —

Total acquisition-related (gains) charges, restructuring charges and other $ ( 16,613 ) $ ( 18,058 ) $ ( 4,506 ) $ ( 13,721 )

Flexion Acquisition

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 .

The Company recognized acquisition-related costs of $ 0.7 million and $ 1.2 million during the three and six months ended June 30, 2023 , respectively, primarily related to the remaining Flexion leases.

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

The Company recognized $ 18.3 million and $ 6.6 million contin gent consideration gains during the three and six months ended June 30, 2023, respectively.

The Company recognized $ 12.5 million and $ 13.3 million of contingent consideration gains during the three and six months ended June 30, 2022, respectively .

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.

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MyoScience Acquisition

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

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

Restructuring Charges

In J une 2023, t he Company implemented a restructuring plan in an effort to improve its operational efficiencies.

The restructuring charges are predominantly related to one-time employee termination benefits through a reduction of headcount, such as severance and related costs.

During the three and six months ended June 30, 2023, t he Company recognized $ 0.9 million of restructuring charges, of which $ 0.4 million was paid.

The remaining $ 0.5 million is expected to be paid in the third quarter of 2023.

NOTE 15— COMMITMENTS AND CONTINGENCIES

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The Company believes that the counterclaim from Fortis is without merit and intends to vigorously defend against all claims.

A trial is expected to commence in the second half of 2023.

The Company is unable to predict the outcome of this action at this time.

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District Court for the District of New Jersey (22-cv-00718) asserting that the 133 mg/10 mL ANDA product will infringe the ’495 and ’336 patents and that the 266 mg/20 mL ANDA product will infringe the ’336 patent.

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

This filing triggered a second

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| Q2 2023 Form 10-Q | Page 27

automatic 30-month stay of final approval for the 133 mg/10 mL ANDA product.

The first and second patent infringement suits were consolidated.

In February 2023, eVenus filed its first amended answer to the first amended complaint, alleging patent invalidity, non-infringement and inequitable conduct.

The Company has denied the allegations in eVenus’s first amended answer.

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.

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11,426,348 (the ’348 patent).

In July 2023, eVenus filed its answer with claims for declaratory judgment, alleging patent invalidity, non-infringement and inequitable conduct with respect to the ’348 patent as well as the Company’s other patents, U.S.

11,357,727 and 11,452,691.

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

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Research Development Foundation

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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.

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

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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.

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These factors include items mentioned herein and the matters discussed and referenced in Part I-Item 1A.

“Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2022 and in other reports as filed with the SEC.

“Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report”) and in other reports as filed with the SEC.

Unless the context requires otherwise, references to “Pacira,” “we,” the “Company,” “us” and “our” in this Quarterly Report on Form 10-Q refer to Pacira BioSciences, Inc.

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

Pacira is the industry leader in our commitment to non-opioid pain management and providing non-opioid pain management options to as many patients as possible to redefine the role of opioids as rescue therapy only.

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

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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., 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.

With the acquisition of Flexion Therapeutics, Inc., or 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, platelet rich plasma injections or other early intervention treatments.

With the acquisition of MyoScience, Inc., or MyoScience, in April 2019 (the “MyoScience Acquisition” ) , 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.

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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

• 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.

In the U.S., EXPAREL is currently indicated for single-dose infiltration in patients six years of age and older 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.

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• Lower extremity nerve block.

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 FDA is currently reviewing our sNDA seeking expansion of the EXPAREL label to include lower extremity nerve block procedures with a Prescription Drug User Fee Act, or PDUFA, action date of November 13, 2023.

Our application is based on positive results from two Phase 3 registration studies.

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).

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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 achieved a statistically significant reduction in postsurgical opioid consumption (p<0.00001) and a statistically significant percentage of opioid-free subjects (p<0.001) through 96 hours

Pacira BioSciences, Inc.

| Q2 2023 Form 10-Q | Page 31

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 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.

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• Global expansion.

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

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.

We have prioritized the European market for global expansion and launched EXPAREL in the U.K.

and targeted E.U.

countries in 2021.

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

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, and in December 2022 submitted an application seeking approval in Brazil.

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

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

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.

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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.

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.

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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.

Pacira BioSciences, Inc.

| Q2 2023 Form 10-Q | Page 32

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

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• 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:

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

Pacira BioSciences, Inc.

| Q2 2023 Form 10-Q | Page 33

The Osteoarthritis Market

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(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

We initiated the second half of our Phase 1 study of EXPAREL for intrathecal analgesia in June 2023.

External Innovation

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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)

Genascence Corporation Phase 1b 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)

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Results of Operations

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.;

Comparison of the Three and Six Months Ended June 30, 2023 and 2022

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

(ii) ZILRETTA in the U.S.;

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Three Months Ended

March 31, % Increase / (Decrease)

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

June 30, % Increase / (Decrease)

2023 2022 2023 2022

Net product sales:

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| Q2 2023 Form 10-Q | Page 36

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.

EXPAREL revenue decreased 1% in the three months ended June 30, 2023 and remained flat in the six months ended June 30, 2023 versus 2022, primarily due to enrolling EXPAREL in the 340B drug pricing program, resulting in greater discounts, and other strategic partnerships as well as the sales mix of EXPAREL vial sizes.

These decreases were largely offset by increases of 4.2% and 5.2% in gross vial volume and increases of 4.4% and 4.3% in gross selling price per unit in the three and six months ended June 30, 2023 versus 2022, respectively.

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.

ZILRETTA revenue increased 7% and 5% in the three and six months ended June 30, 2023 versus 2022, respectively, primarily due to increases of 8.1% and 5.4% in gross kit volume and increases of 2.0% and 2.9% in gross selling price per unit during the applicable periods and was partially offset by higher customer discounting primarily due to expanded contracting efforts.

Net product sales of iovera° increased 37% and 35% in the three and six months ended June 30, 2023 versus 2022, respectively, due to increases of 38% in Smart Tip volume in both periods and increases of 6.7% and 3.1% in gross selling price per Smart Tip, partially offset by higher customer discounting.

Bupivacaine liposome injectable suspension net product sales decreased 27% and 45% in the three and six months ended June 30, 2023 versus 2022, respectively.

Its related royalties decreased 100% and 35% in the three and six months ended June 30, 2023 versus 2022, respectively, primarily due to the timing and product mix of orders and related sales made by Aratana Therapeutics, Inc.

for veterinary use.

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

The following tables provide a summary of activity with respect to our sales related allowances and accruals related to EXPAREL and ZILRETTA for the six months ended June 30, 2023 and 2022 (in thousands):

June 30, 2023 Returns Allowances Prompt Payment Discounts Service

Chargebacks Government Rebates Total

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Payments / Adjustments (956) (5,918) (8,677) (45,659) (982) (62,192)

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

Balance at June 30, 2023 $ 1,857 $ 1,221 $ 3,411 $ 6,729 $ 831 $ 14,049

June 30, 2022 Returns Allowances Prompt Payment Discounts Service

Chargebacks Government

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

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

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.

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

Total reductions of gross product sales from sales-related allowances and accruals were $63.9 million and $34.4 million, or 16.3% and 9.6% of gross product sales, for the six months ended June 30, 2023 and 2022, respectively.

The overall 6.7% 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.

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Three Months Ended

March 31, % Increase / (Decrease)

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

June 30, % Increase / (Decrease)

2023 2022 2023 2022

Cost of goods sold $ 48,207 $ 50,627 (5)% $ 97,227 $ 86,701 12%

Gross margin 72 % 70 % 71 % 74 %

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.

Gross margin increased two percentage-points in the three months ended June 30, 2023 versus 2022, mainly due to higher costs in 2022 for the transition of manufacturing sites for iovera°, partially offset by an increase in sales-related allowances and accruals as a result of enrolling EXPAREL in the 340B drug pricing program which resulted in a lower net selling price in the current period.

Gross margin decreased three percentage-points in the six months ended June 30, 2023 versus 2022, mainly due to higher EXPAREL product cost due to operational challenges at our third-party contract manufacturing site in Swindon, England and discounting resulting in a lower net selling price in the current period, partially offset by higher costs in 2022 for the transition of manufacturing sites for iovera° and ZILRETTA product costs due to a fair value step-up of inventory and fixed assets acquired in the Flexion Acquisition.

Research and Development Expenses

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Three Months Ended

March 31, % Increase / (Decrease)

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

June 30, % Increase / (Decrease)

2023 2022 2023 2022

Clinical and preclinical development $ 5,194 $ 17,734 (71)% $ 10,455 $ 31,174 (66)%

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

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.

Total research and development expense decreased 28% and 25% in the three and six months ended June 30, 2023 versus 2022, respectively.

Clinical and preclinical development expense decreased 71% and 66% in the three and six months ended June 30, 2023 versus 2022, respectively, due to the completion of two EXPAREL lower extremity nerve block trials in bunionectomy and

Pacira BioSciences, Inc.

| Q2 2023 Form 10-Q | Page 38

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.

TKA in the third quarter of 2022, 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 83% and 69% in the three and six months ended June 30, 2023 versus 2022, respectively, 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-401.

Regulatory and other expense increased 34% and 35% in the three and six months ended June 30, 2023 versus 2022, respectively, due to increased enrollment and additional sites related to an observational iovera° 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 13% and 21% in the three and six months ended June 30, 2023 versus 2022, respectively, primarily due to greater equity awards outstanding for research and development personnel, partially offset by a lower fair value of newer equity awards granted.

Selling, General and Administrative Expenses

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Three Months Ended

March 31, % Increase / (Decrease)

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

June 30, % Increase / (Decrease)

2023 2022 2023 2022

Sales and marketing $ 37,462 $ 36,854 2% $ 79,041 $ 75,294 5%

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% of total revenues 38 % 38 % 41 % 39 %

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.

Total selling, general and administrative expense was flat in the three months and increased 5% in the six months ended June 30, 2023 versus 2022, respectively.

Sales and marketing expense increased 2% and 5% in the three and six months ended June 30, 2023 versus 2022, respectively, driven by an increase in marketing investments in our products, including 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.

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

General and administrative expense was flat in the three months and increased 9% in the six months ended June 30, 2023 versus 2022, respectively, 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.

Stock-based compensation decreased 9% and 4% for the three and six months ended June 30, 2023 versus 2022, respectively, primarily due to a decrease in the number of equity awards outstanding for selling, general and administrative personnel.

Pacira BioSciences, Inc.

| Q2 2023 Form 10-Q | Page 39

Amortization of Acquired Intangible Assets

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Three Months Ended

March 31, % Increase / (Decrease)

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

June 30, % Increase / (Decrease)

2023 2022 2023 2022

Amortization of acquired intangible assets $ 14,322 $ 14,322 —% $ 28,644 $ 28,644 —%

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, termination costs and other activities during the periods indicated, including percent changes (dollar amounts in thousands):

Acquisition-Related (Gains) Charges, Restructuring Charges and Other

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

Three Months Ended

March 31, % Increase / (Decrease)

Acquisition-related charges (gains), 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.

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

June 30, % Increase / (Decrease)

2023 2022 2023 2022

Acquisition-related (gains) charges, net $ (17,549) $ (18,058) (3)% $ (5,442) $ (13,721) (60)%

Restructuring charges 936 — N/A 936 — N/A

Total acquisition-related (gains) charges, restructuring charges and other $ (16,613) $ (18,058) (8)% $ (4,506) $ (13,721) (67)%

Total acquisition-related (gains) charges, restructuring charges and other decreased 8% and 67% in the three and six months ended June 30, 2023 versus 2022.

During the three and six months ended June 30, 2023, we recognized acquisition-related gains, net of $17.5 million and $5.4 million, respectively.

These gains were primarily due to adjustments to long-term forecasts which reduced the probability of meeting the sales-based contingent consideration milestones for the Flexion Acquisition by December 31, 2030, the expiration date for achieving the milestones.

In addition, in June 2023 we implemented a restructuring plan in an effort to improve our operational efficiencies and recognized $0.9 million in one-time employee termination benefits through a reduction of headcount.

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

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

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

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

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

Pacira BioSciences, Inc.

| Q2 2023 Form 10-Q | Page 40

Other Expense, Net

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Three Months Ended

March 31, % Increase / (Decrease)

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

June 30, % Increase / (Decrease)

2023 2022 2023 2022

Interest expense $ (3,865) $ (8,833) (56)% $ (13,454) $ (19,079) (29)%

Interest income 2,111 252 100% + 5,253 523 100%+

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

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

Other, net (269) (647) (58)% (279) (771) (64)%

Total other expense, net $ (2,023) (9,228) (78)% $ (25,406) $ (19,327) 31%

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.

Total other expense, net decreased 78% in the three months ended June 30, 2023 and increased 31% in the six months ended June 30, 2023 versus 2022.

The 56% and 29% decrease in interest expense during the three and six months ended June 30, 2023, respectively, was primarily driven by entering into the TLA Term Loan (as defined below) in March 2023 in order to retire our term loan B and related credit agreement (the “TLB Term Loan”), and, to a lesser extent, the absence of our 2.375% convertible senior notes that matured in April 2022.

Retiring our TLB Term Loan is expected to significantly further 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 and six months ended June 30, 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

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):

Income Tax Expense

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

Three Months Ended

March 31, % Increase / (Decrease)

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

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

June 30, % Increase / (Decrease)

2023 2022 2023 2022

Income tax expense $ 12,091 $ 2,131 100% + $ 5,153 $ 2,597 98%

Effective tax rate 32 % 10 % 45 % 9 %

The effective tax rates were 26% and 6% for the three months ended March 31, 2023 and March 31, 2022, respectively.

The effective tax rates were 32% and 45% for the three and six months ended June 30, 2023, respectively.

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

The effective tax rate for the three and six months ended June 30, 2023 includes costs related to non-deductible stock-based compensation, a valuation allowance recorded against non-U.S.

results and non-deductible executive compensation.

The effective tax rates for the three and six months ended June 30, 2022 include benefits related to stock-based compensation, a first quarter milestone payment to SkyePharma Holding, Inc.

(now a subsidiary of Vectura Group plc), or Skyepharma, and a fair value adjustment for Flexion contingent consideration, offset by nondeductible executive compensation costs and a valuation allowance against non-U.S.

Pacira BioSciences, Inc.

| Q2 2023 Form 10-Q | Page 41

Liquidity and Capital Resources

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

As of March 31, 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.

As of June 30, 2023, we had an accumulated deficit of $142.5 million, cash and cash equivalents and available-for-sale investments of $220.8 million and working capital of $320.4 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.

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

Three Months Ended

Six Months Ended

Condensed Consolidated Statements of Cash Flows Data:

Net cash (used in) provided by:

Net cash provided by (used in):

Operating activities $ 62,627 $ 60,583

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Operating Activities

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.

During the six months ended June 30, 2023, net cash provided by operating activities was $62.6 million, compared to $60.6 million during the six months ended June 30, 2022.

The increase of $2.0 million was attributable to higher revenues, increased interest income and lower interest expense, partially offset by the payment of a $13.0 million termination fee relating to a licensing agreement and lower gross margin.

Investing Activities

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.

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| 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.

During the six months ended June 30, 2023, net cash provided by investing activities was $73.5 million, which reflected proceeds from $90.2 million of available-for-sale investment sales (net of purchases), partially offset by purchases of fixed assets of $10.0 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 $6.8 million.

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

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

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.

During the six months ended June 30, 2023, net cash used in financing activities was $153.5 million, which consisted of a $296.9 million repayment of TLB Term Loan principal as well as a $5.8 million prepayment penalty in connection with the retirement of the TLB Term Loan facility, partially offset by the net proceeds from the TLA Term Loan of $149.6 million and the exercise of stock options of $1.9 million and $1.7 million from the issuance of common stock through our ESPP.

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.

During the six months ended June 30, 2022, net cash used in financing activities was $335.2 million, which primarily consisted of a $192.6 million principal repayment of the 3.375% convertible senior notes due 2024 (the “Flexion 2024 Notes”) as part of a repurchase offer to the holders of the Flexion 2024 Notes that was triggered by the Flexion Acquisition, a $157.0 million repayment of our 2.375% convertible senior notes that matured on April 1, 2022 and a $9.4 million scheduled

Pacira BioSciences, Inc.

| Q2 2023 Form 10-Q | Page 42

repayment of TLB Term Loan principal, partially offset by $21.9 million of proceeds from the exercise of stock options and $1.8 million from the issuance of common stock through our ESPP.

2028 Term Loan A Facility

On March 31, 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.

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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%.

During the six months ended June 30, 2023, the Company made a scheduled principal payment of $2.8 million.

As of June 30, 2023, borrowings under the TLA Term Loan consisted entirely of term benchmark borrowings at a rate of 8.01%.

Subsequent to June 30, 2023, the Company made a $25.0 million principal prepayment in July 2023.

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.

As of June 30, 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.

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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.

During the six months ended June 30, 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.

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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.

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| Q1 2023 Form 10-Q | Page 40

The 2025 Notes mature on August 1, 2025.

At March 31, 2023, the outstanding principal on the 2025 Notes was $402.5 million.

At June 30, 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.

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

At March 31, 2023, the outstanding principal on the Flexion 2024 Notes was $8.6 million.

At June 30, 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.

Pacira BioSciences, Inc.

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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 TLA Term Loan, our Notes (including any conversions of our Notes) through the next 12 months.

We believe that our existing cash and cash equivalents, available-for-sale investments and cash received from product sales will be sufficient to enable us to fund our operating expenses, capital expenditure requirements and payment of the interest and principal on our TLA Term Loan, Flexion 2024 Notes and 2025 Notes (collectively, the “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:

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• 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 (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 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 capital projects at the Thermo Fisher site in Swindon, England;

• the cost and timing of additional strategic investments, including additional investments under existing agreements;

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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

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 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 .

For more information on our contractual obligations and commercial commitments, see Part II, Item 7 in our 2022 Annual Report .

Pacira BioSciences, Inc.

| Q2 2023 Form 10-Q | Page 44

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