What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-02 compared with 2023-08-02 · 344 added, 300 removed, 1061 unchanged (38% of the section changed)

3 unchanged sentences

(In thousands, except share and per share amounts)

September 30,

2023 December 31,

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5,000,000 shares authorized;

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

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

Common stock, par value $ 0.001 ;

250,000,000 shares authorized;

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

46,426,836 and 45,927,790 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively

Additional paid-in capital 963,181 924,095

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

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Amortization of acquired intangible assets 14,322 14,322 42,966 42,966

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

Contingent consideration charges (gains), restructuring charges and other 3,356 489 ( 1,150 ) ( 13,232 )

Total operating expenses 146,205 146,177 439,227 424,951

8 unchanged sentences

Income tax expense ( 5,743 ) ( 2,762 ) ( 10,896 ) ( 5,359 )

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

Net income (loss) $ 10,858 $ ( 693 ) $ 17,085 $ 26,011

Net income (loss) per share:

Basic net income (loss) per common share $ 0.23 $ ( 0.02 ) $ 0.37 $ 0.57

Diluted net income (loss) per common share $ 0.23 $ ( 0.02 ) $ 0.37 $ 0.56

Weighted average common shares outstanding:

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PACIRA BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

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

Net income (loss) $ 10,858 $ ( 693 ) $ 17,085 $ 26,011

Other comprehensive income (loss):

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

Net unrealized gain (loss) on investments, net of tax 146 ( 163 ) 362 ( 1,056 )

Foreign currency translation adjustments 17 98 8 219

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

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

Total other comprehensive income (loss) 163 ( 65 ) 370 ( 837 )

Comprehensive income (loss) $ 11,021 $ ( 758 ) $ 17,455 $ 25,174

See accompanying notes to condensed consolidated financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED JUNE 30, 2023 AND 2022

FOR THE THREE MONTHS ENDED SEPTEMBER 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

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

Exercise of stock options 1 — 25 — — 25

Vested restricted stock units 17 — — — — —

Common stock issued under employee stock

purchase plan 50 — 1,672 — — 1,672

Stock-based compensation — — 12,530 — — 12,530

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

Other comprehensive income (Note 10) — — — — 163 163

Net income — — — 10,858 — 10,858

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

Balance at September 30, 2023 46,427 $ 46 $ 963,181 $ ( 131,666 ) $ ( 10 ) $ 831,551

Common Stock Additional

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Shares Amount Total

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

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

Vested restricted stock units 25 — — — — —

Common stock issued under employee stock

purchase plan 37 — 1,821 — — 1,821

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

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

Other comprehensive loss (Note 10) — — — — ( 65 ) ( 65 )

Net income — — — 19,876 — 19,876

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

Net loss — — — ( 693 ) — ( 693 )

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

See accompanying notes to condensed consolidated financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(In thousands)

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Net income — — — 17,085 — 17,085

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

Balance at September 30, 2023 46,427 $ 46 $ 963,181 $ ( 131,666 ) $ ( 10 ) $ 831,551

Common Stock Additional

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Net income — — — 26,011 — 26,011

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

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

(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.

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(In thousands)

Six Months Ended

Nine Months Ended

September 30,

Operating activities:

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Loss on early extinguishment of debt 16,926 —

Loss on disposal of fixed assets — 193

Stock-based compensation 35,475 35,415

Changes in contingent consideration ( 3,847 ) ( 23,394 )

Loss on investment 11 108

Impairment of investment — 10,000

Other losses 2,415 377

Changes in operating assets and liabilities:

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Basis of Presentation and Principles of Consolidation

These interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (SEC), for interim reporting.

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 “2022 Annual Report”).

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 financial statements at September 30, 2023, and for the three and nine-month periods ended September 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.

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The Company also sells EXPAREL directly to ambulatory surgery centers and physicians.

The Company sells ZILRETTA primarily to specialty distributors and a specialty pharmacy, who then subsequently resell ZILRETTA to physicians, clinics and certain medical centers or hospitals.

The Company sells ZILRETTA primarily to specialty distributors and specialty pharmacies, who then subsequently resell ZILRETTA to physicians, clinics and certain medical centers or hospitals.

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

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

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

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.

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

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

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

The Company primarily sells ZILRETTA to specialty distributors and a specialty pharmacy, who then subsequently resell ZILRETTA to physicians, clinics and certain medical centers or hospitals.

The Company primarily sells ZILRETTA to specialty distributors and specialty pharmacies, who then subsequently resell ZILRETTA to physicians, clinics and certain medical centers or hospitals.

The Company also contracts directly with healthcare providers and intermediaries such as GPOs.

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Accounts Receivable

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

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

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

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

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

June 30, December 31,

September 30, December 31,

Raw materials $ 49,196 $ 39,810

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

June 30, December 31,

September 30, December 31,

Machinery and equipment $ 120,481 $ 118,684

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Fixed assets, net $ 175,783 $ 183,512

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.

For the three months ended September 30, 2023 and 2022, depreciation expense was $ 4.1 million and $ 5.8 million, respectively.

For the three months ended September 30, 2023 and 2022, there was $ 0.7 million and $ 1.1 million of capitalized interest on the construction of manufacturing sites, respectively.

For the nine months ended September 30, 2023 and 2022, depreciation expense was $ 14.1 million and $ 18.0 million, respectively.

For the nine months ended September 30, 2023 and 2022, there was $ 2.8 million and $ 2.9 million of capitalized interest on the construction of manufacturing sites, respectively.

At September 30, 2023 and December 31, 2022, total fixed assets, net includes manufacturing process equipment and leasehold improvements located in Europe in the amount of $ 38.3 million and $ 44.7 million, respectively.

As of September 30, 2023 and December 31, 2022, the Company had asset retirement obligations of $ 4.0 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

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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.

During the third quarter of 2023, the Company partially exited its Burlington, Massachusetts office space lease that had been assumed as part of the Flexion Acquisition through 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 partial lease termination resulted in a nominal gain which was recorded within contingent consideration charges (gains), restructuring charges and other in the condensed consolidated statements of operations.

Pacira BioSciences, Inc.

| Q3 2023 Form 10-Q | Page 13

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 Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

3 unchanged sentences

Total $ 3,891 $ 3,811 $ 11,773 $ 11,860

Pacira BioSciences, Inc.

| Q2 2023 Form 10-Q | Page 13

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

Six Months Ended

Nine Months Ended

September 30,

Cash paid for operating lease liabilities, net of lease incentives $ 11,055 $ 9,922

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

September 30,

Weighted average remaining lease term 6.26 years 7.11 years

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Year Aggregate Minimum

2023 (remaining six months) $ 6,925

2023 (remaining three months) $ 3,249

Thereafter 27,351

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(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 June 30, 2023 and December 31, 2022 was $ 163.2 million.

The balance at each of September 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.

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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):

June 30, 2023 Gross Carrying Value Accumulated

Amortization Intangible

Assets, Net Weighted-Average Useful Lives

September 30, 2023 Gross Carrying Value Accumulated Amortization Intangible Assets, Net Weighted-Average Useful Lives

Developed technologies $ 590,000 $ ( 127,336 ) $ 462,664 10 years, 5 months

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Total intangible assets, net $ 624,956 $ ( 127,376 ) $ 497,580

December 31, 2022 Gross Carrying Value Accumulated

Amortization Intangible

Assets, Net Weighted-Average Useful Lives

December 31, 2022 Gross Carrying Value Accumulated Amortization Intangible Assets, Net Weighted-Average Useful Lives

Developed technologies $ 590,000 $ ( 84,376 ) $ 505,624 10 years, 5 months

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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 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.

Amortization expense on intangible assets was $ 14.3 million for both the three months ended September 30, 2023 and 2022 and $ 43.0 million for both the nine months ended September 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 $ 14.3 million for the remaining three 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.

1 unchanged sentence

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

June 30, December 31,

September 30, December 31,

Term loan A facility maturing March 2028 $ 117,965 $ —

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

September 30,

Term loan A facility maturing March 2028 $ 119,375

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Total debt, net of debt discount and deferred financing costs $ 117,965

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 Term Loan matures on March 31, 2028 and the TLA Credit Agreement 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.

Due to voluntary principal prepayments of $ 27.8 million made during the three months ended September 30, 2023, the Company is not required to make further principal payments for the remainder of 2023 and 2024.

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 June 30, 2023, the Company was in compliance with all financial covenants under the TLA Credit Agreement.

As of September 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.

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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 %.

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.

During the nine months ended September 30, 2023, the Company made a scheduled principal payment of $ 2.8 million as well as $ 27.8 million of voluntary principal prepayments.

As of September 30, 2023, borrowings under the TLA Term Loan consisted entirely of term benchmark borrowings at a rate of 8.47 %.

Pacira BioSciences, Inc.

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

June 30, December 31,

September 30, December 31,

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

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

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.

During the nine months ended September 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

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

June 30, December 31,

September 30, December 31,

0.750 % convertible senior notes due August 2025

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Holders may convert the 2025 Notes at any time prior to 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 June 30, 2023, the conditions for conversion were not met.

During the quarter ended September 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.

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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 June 30, 2023, the 2025 Notes had a market price o f $926 pe r $1,000 principal amount.

As of September 30, 2023, the 2025 Notes had a market price o f $909 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.

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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 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.

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

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

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

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

Pacira BioSciences, Inc.

| Q3 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.

Convertible Senior Notes Due 2022

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

Interest Expense

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

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| Q3 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):

At September 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

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$ 8,641 $ — $ 8,641 $ —

(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.

(1) The closing price of the Company’s common stock as reported on the Nasdaq Global Select Market was $ 30.68 per share at September 30, 2023 compared to a conversion price of $ 71.78 per share.

At September 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 — ( 135 ) ( 135 )

Balance at June 30, 2023

Balance at September 30, 2023

$ 15,877 $ 11,938 $ 27,815

Acquisition-Related Contingent Consideration

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 has recognized contingent consideration related to the Flexion Acquisition and the MyoScience Acquisition in the amount of $ 24.3 million and $ 28.1 million as of September 30, 2023 and December 31, 2022, respectively.

For more information, see Note 14, Contingent Consideration Charges (Gains), 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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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 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.

During the three months ended September 30, 2023, the Company recorded charges of $ 2.8 million primarily due to market volatility which affects the liability’s present value.

During the nine months ended September 30, 2023, the Company recorded gains of $ 3.8 million 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 nine months ended September 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 nine months ended September 30, 2022, the Company recorded gains of $ 0.5 million and $ 13.8 million, respectively, primarily due to adjustments to near-term forecasts for the earnout period of the contingent consideration.

These adjustments were recorded as contingent consideration charges (gains), restructuring charges and other in the condensed consolidated statements of operations.

At September 30, 2023, the weighted average discount rate was 10.6 % and the probability of payment for the achievement of the remaining regulatory milestone by the expiration date was 12.5 %.

As of September 30, 2023 and December 31, 2022, a contingent consideration liability related to the Flexion Acquisition was recognized in the amount of $ 24.3 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 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.

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

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

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

During the three and nine months ended September 30, 2022 , the Company recognized contingent consideration gains of $ 0.5 million and $ 9.6 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:

1 unchanged sentence

Utilized as of

June 30, 2023

September 30, 2023

Discount rates 10.1 % to 11.1 %

Probabilities of payment for regulatory milestones 0 % to 12.5 %

Projected years of payment for regulatory and commercial milestones 2030

Projected year of payment for regulatory and commercial milestones 2030

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

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Fair value adjustments and accretion ( 3,847 )

Balance at June 30, 2023

Balance at September 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 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,

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

At September 30, 2023 and December 31, 2022, all of the

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| Q3 2023 Form 10-Q | Page 21

which are measured at fair value using standard industry models with observable inputs.

Company’s short-term and noncurrent investments are classified as available-for-sale investments and are determined to be Level 2 instruments, which are measured at fair value using standard industry models with observable inputs.

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

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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 June 30, 2023 and December 31, 2022 (in thousands):

June 30, 2023 Investments

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

September 30, 2023 Investments

Losses Fair Value

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

At June 30, 2023, there were no investments available for sale that were materially less than their amortized cost.

At September 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 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.

At September 30, 2023 and December 31, 2022, the interest receivable from its available-for-sale investments recognized in prepaid expenses and other current assets was $ 0.4 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 June 30, 2023, three wholesalers each accounted for over 10% of the Company’s accounts receivable, at 36 %, 21 % and 15 %.

As of September 30, 2023, three wholesalers each accounted for over 10% of the Company’s accounts receivable, at 37 %, 18 % and 15 %.

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

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

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

Pacira BioSciences, Inc.

8 unchanged sentences

Foreign currency translation adjustments — 8 8

Balance at June 30, 2023

Balance at September 30, 2023

$ ( 161 ) $ 151 $ ( 10 )

5 unchanged sentences

Foreign currency translation adjustments — 219 219

Balance at June 30, 2022

Balance at September 30, 2022

$ ( 917 ) $ 247 $ ( 670 )

(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.

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

NOTE 11— STOCK PLANS

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

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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 six months ended June 30, 2023:

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

Stock Options Number of

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Expired ( 339,565 ) 53.15

Outstanding at June 30, 2023

Outstanding at September 30, 2023

7,110,643 49.82

6 unchanged sentences

Forfeited ( 143,866 ) 55.39

Unvested at June 30, 2023

Unvested at September 30, 2023

1,394,326 48.01

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

The weighted average fair value of stock options granted during the nine months ended September 30, 2023 wa s $ 16.21 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 Six Months Ended June 30, 2023

Black-Scholes Weighted Average Assumption Nine Months Ended September 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 six months ended June 30, 2023, 50,634 shares were purchased and issued through the ESPP.

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

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| Q3 2023 Form 10-Q | Page 24

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.

NOTE 12— NET INCOME (LOSS) PER SHARE

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

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

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 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 (loss) 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 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):

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

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

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

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

Net income (loss)—basic $ 10,858 $ ( 693 ) $ 17,085 $ 26,011

ASU 2020-06 convertible notes if-converted method adjustment 1,029 — — 3,112

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

Adjusted net income (loss)—diluted $ 11,887 $ ( 693 ) $ 17,085 $ 29,123

Weighted average common shares outstanding—basic 46,416 45,831 46,151 45,400

6 unchanged sentences

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):

Basic net income (loss) per common share $ 0.23 $ ( 0.02 ) $ 0.37 $ 0.57

Diluted net income (loss) per common share $ 0.23 $ ( 0.02 ) $ 0.37 $ 0.56

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| Q3 2023 Form 10-Q | Page 25

The following table summarizes the outstanding stock options, RSUs, ESPP purchase options and convertible senior notes that were excluded from the diluted net income (loss) 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

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

2 unchanged sentences

Weighted average number of RSUs 1,349 1,180 956 277

Weighted average ESPP purchase options 39 — 13 —

Total 8,445 13,132 12,530 3,513

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.

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| Q2 2023 Form 10-Q | Page 25

For the three months ended September 30, 2022 and nine months ended September 30, 2023, the antidilutive impact associated with the Company’s convertible senior notes would have included an interest expense add-back to net income of $ 1.0 million and $ 3.1 million, respectively.

NOTE 13— INCOME TAXES

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

6 unchanged sentences

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

The Company’s effective tax rates for the three 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):

The Company’s effective tax rates for the three and nine months ended September 30, 2023 include costs related to non-deductible stock-based compensation and non-deductible executive compensation, partially offset by credits and a fair value adjustment for Flexion contingent consideration.

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

operating results and U.S.

capital losses, partially offset by benefits for a first quarter Skyepharma milestone payment, a fair value adjustment for Flexion contingent consideration and the impact of stock-based compensation adjustments.

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| Q3 2023 Form 10-Q | Page 26

NOTE 14— CONTINGENT CONSIDERATION CHARGES (GAINS), RESTRUCTURING CHARGES AND OTHER

Contingent consideration charges (gains), restructuring charges and other for the three and nine months ended September 30, 2023 and 2022 summarized below (in thousands):

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

6 unchanged sentences

Restructuring charges 173 — 1,109 —

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 $ 0.7 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 .

Total contingent consideration charges (gains), restructuring charges and other $ 3,356 $ 489 $ ( 1,150 ) $ ( 13,232 )

Flexion Acquisition and Contingent Consideration

The Company recognized acquisition-related costs of $ 0.4 million and $ 1.6 million during the three and nine months ended September 30, 2023 , respectively, primarily related to vacant and underutilized Flexion leases.

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

The Company recognized $ 2.8 million of contingent consideration charges and $ 3.8 million of contin gent consideration gains during the three and nine months ended September 30, 2023, respectively.

The Company recognized $ 0.5 million and $ 13.8 million of contingent consideration gains during the three and nine months ended September 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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| Q2 2023 Form 10-Q | Page 26

MyoScience Acquisition

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.

MyoScience Contingent Consideration

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

2 unchanged sentences

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.

During the three and nine months ended September 30, 2023, t he Company recognized $ 0.2 million and $ 1.1 million, respectively, of restructuring charges, of which substantially all has been paid.

NOTE 15— COMMITMENTS AND CONTINGENCIES

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

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

In addition, the Company and Pacira

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| Q3 2023 Form 10-Q | Page 27

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

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

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

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.

A trial was conducted in September 2023, and a decision is expected in the second half of 2024.

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

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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.

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

The first and second patent infringement suits were consolidated.

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

The Company has subsequently voluntarily dismissed its claims with respect to the ’336 Patent.

A trial on the remaining claims is currently scheduled for February 2024.

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.

2 unchanged sentences

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.

11,357,727 and 11,452,691.The parties have subsequently dismissed all patents other than the ’348 patent from this litigation.

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

Research Development Foundation

1 unchanged sentence

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

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

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

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

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

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

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

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| Q3 2023 Form 10-Q | Page 28

lawsuit in the U.S.

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

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

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

On August 8, 2023, the United States District Court, District of Nevada, granted the Company’s motion for partial summary judgment in respect to the Company’s claim for a declaration that it no longer owes royalties for EXPAREL made under the 45-liter manufacturing process as of December 24, 2021.

As a result, the Company expects to receive $ 14.5 million from RDF, representing the royalties that the Company paid to RDF under protest after December 24, 2021 for EXPAREL made from the 45-liter manufacturing process.

Once it becomes probable that the settlement amount will be received, the Company will record a settlement gain within other operating expenses in the condensed consolidated statement of operations.

During the pendency of the remaining lawsuit, the Company will continue to pay royalties associated with the 200-liter manufacturing process to RDF under protest.

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

Other Commitments and Contingencies

12 unchanged sentences

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

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

The Company received notification from the FDA in October 2023 that its pediatric studies requirement had been waived for the indication of brachial plexus interscalene nerve block to produce postsurgical regional analgesia in pediatric patients.

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

Contingent Milestone Payments

1 unchanged sentence

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 in November 2021.

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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| Q2 2023 Form 10-Q | Page 28

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

the successful transition of our chief executive officer and chairman;

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

49 unchanged sentences

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 October 2023, we announced the appointments of Marcelo Bigal, MD, PhD, Abraham Ceesay, Michael Yang and Alethia Young to our Board of Directors.

Each of the new directors adds diversity of experience and background to the Pacira board of directors, while also enhancing racial and gender diversity.

Following these director appointments, Pacira now has 12 experienced directors, all with relevant industry experience.

• In October 2023, we announced a grant of $2.5 million to the American Society of Anesthesiologists, or ASA, Charitable Foundation, to advance the medical specialty of anesthesiology and pain medicine;

facilitate best-in-class clinician education and improve patient care.

We also joined ASA’s Industry Supporter Program to support the Society’s more than 56,000 physician anesthesiologist members to improve patient care and reduce reliance on opioids for the treatment of postsurgical or chronic pain.

As an Industry Supporter, Pacira is helping to establish a strong, mutually beneficial relationship with the anesthesiology community, strengthen collaboration between physician anesthesiologists and industry, and add to the value the Society provides to patients and the public, while providing invaluable year-round support of ASA programs and priorities related to non-opioid alternatives and postsurgical care.

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| Q3 2023 Form 10-Q | Page 31

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.

8 unchanged sentences

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 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

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| Q2 2023 Form 10-Q | Page 31

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 compared with bupivacaine HCl, which were key secondary endpoints.

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

3 unchanged sentences

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

• Stellate ganglion block.

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

Planning is underway for a multicenter Phase 3 registration study of EXPAREL as a stellate ganglion block for preventing postoperative atrial fibrillation after cardiothoracic surgery.

We are working with a steering committee of Key Opinion Leaders in regional anesthesia and stellate ganglion blocks to help finalize study design.

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

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

We are also working to align with the FDA on our plan to expand the EXPAREL label to include stellate ganglion block in the event that the results of the Phase 3 study are sufficiently positive.

We believe a stellate ganglion block utilizing EXPAREL will be critical in an unmet need with post-operative ventricular and atrial dysrhythmias.

• Global expansion.

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

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.

We launched EXPAREL in the U.K.

and targeted E.U.

countries in 2021.

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

4 unchanged sentences

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

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

PLGA is a proven extended-release delivery vehicle that is metabolized to carbon dioxide and water as it releases drug in the intra-articular space

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| Q3 2023 Form 10-Q | Page 32

and is used in other approved drug products and surgical devices.

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

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shortly thereafter.

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.

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

In addition, we are evaluating a study in knee OA patients comparing ZILRETTA to immediate release TA in patients with Type 2 diabetes.

ZILRETTA Clinical Benefits

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

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

The pivotal Phase 3 trial showed that ZILRETTA significantly reduced OA knee pain for 12 weeks, with some people experiencing pain relief through 16 weeks.

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

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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

Planning is underway for a multicenter Phase 3 registration study of ZILRETTA for the treatment of glenohumeral OA.

We received agreement from the FDA to move forward with that study, and we plan to expand the ZILRETTA label to include OA of the shoulder in the event that the results of the Phase 3 study are sufficiently positive.

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

Pacira BioSciences, Inc.

| Q3 2023 Form 10-Q | Page 33

• iovera° is repeatable;

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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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Clinical Development Programs

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

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

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

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

pMVL-Based Clinical Programs

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

We initiated a second Phase 1 study of EXPAREL for intrathecal analgesia in June 2023.

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| Q3 2023 Form 10-Q | Page 34

External Innovation

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

Pacira BioSciences, Inc.

| Q3 2023 Form 10-Q | Page 36

Pacira Training Facilities

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

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| Q2 2023 Form 10-Q | Page 35

Tampa, Florida

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

Pacira BioSciences, Inc.

| Q3 2023 Form 10-Q | Page 37

Results of Operations

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

Comparison of the Three and Nine Months Ended September 30, 2023 and 2022

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

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

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

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

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

Three Months Ended

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

June 30, % Increase / (Decrease)

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

September 30, % Increase / (Decrease)

2023 2022 2023 2022

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Total revenues $ 163,926 $ 167,466 (2)% $ 493,734 $ 494,868 (0)%

Pacira BioSciences, Inc.

| Q2 2023 Form 10-Q | Page 36

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 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.

EXPAREL revenue decreased 3% and 1% in the three and nine months ended September 30, 2023 versus 2022, respectively, primarily due to decreases of 4% in net selling price per unit in each period related to enrolling EXPAREL in the 340B drug pricing program and expanding other contracting activities, partially offset by a January 2023 price increase.

EXPAREL revenue was also impacted by increases in gross vial volumes of 2% and 4% in the three and nine months ended September 30, 2023 versus 2022, respectively, and reduced by 1% due to a shift in sales mix in both periods.

ZILRETTA revenue increased 9% and 6% in the three and nine months ended September 30, 2023 versus 2022, respectively, primarily due to increases of 6% in gross kit volume in both periods and increases of 2% and 1% in net selling price per unit during the applicable periods.

Net product sales of iovera° increased 18% and 28% in the three and nine months ended September 30, 2023 versus 2022, respectively, due to increases of 22% and 31% in Smart Tip volume and increases of 2% and 3% in selling price per Smart Tip, respectively, partially offset by a higher returns allowance.

Bupivacaine liposome injectable suspension net product sales decreased 71% and 59% in the three and nine months ended September 30, 2023 versus 2022, respectively.

Its related royalties decreased 62% and 46% in the three and nine months ended September 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 six months ended June 30, 2023 and 2022 (in thousands):

June 30, 2023 Returns Allowances Prompt Payment Discounts Service

Chargebacks Government Rebates Total

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

September 30, 2023 Returns

Allowances Prompt

Discounts Service

Chargebacks Government

Rebates Total

Balance at December 31, 2022 $ 1,691 $ 1,187 $ 3,193 $ 5,452 $ 786 $ 12,309

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Payments / Adjustments (1,287) (8,874) (13,218) (68,676) (1,460) (93,515)

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

Balance at September 30, 2023 $ 2,114 $ 1,148 $ 3,389 $ 6,758 $ 914 $ 14,323

Pacira BioSciences, Inc.

| Q3 2023 Form 10-Q | Page 38

September 30, 2022 Returns

Allowances Prompt

Discounts Service

Chargebacks Government

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Payments / Adjustments (2,802) (8,286) (13,069) (29,092) (1,181) (54,430)

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.

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

Total reductions of gross product sales from sales-related allowances and accruals were $95.5 million and $52.8 million, or 16.3% and 9.7% of gross product sales, for the nine months ended September 30, 2023 and 2022, respectively.

The overall 6.6% increase in sales-related allowances and accruals as a percentage of gross product sales was primarily related to accruals as a result of enrolling EXPAREL in the 340B drug pricing program and chargeback-related allowances.

Pacira BioSciences, Inc.

| Q2 2023 Form 10-Q | Page 37

Cost of Goods Sold

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Three Months Ended

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

June 30, % Increase / (Decrease)

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

September 30, % Increase / (Decrease)

2023 2022 2023 2022

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Gross margin 76 % 70 % 72 % 72 %

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.

Gross margin increased six percentage-points in the three months ended September 30, 2023 versus 2022, mainly due to lower royalty expense due to no longer owing royalties for EXPAREL made under the 45-liter manufacturing process (as further discussed below) and lower inventory reserves.

These increases were 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 period.

Also offsetting were higher ZILRETTA product cost sold in the period.

Gross margin remained flat in the nine months ended September 30, 2023 versus 2022, mainly due to higher EXPAREL product cost and 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 period.

This was offset by higher costs in 2022 for the transition of iovera° manufacturing sites and next-generation handheld devices.

On August 8, 2023, the United States District Court, District of Nevada, concluded we are no longer obligated to pay royalties to the Research and Development Foundation for EXPAREL made under the 45-liter manufacturing process.

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

Research and Development Expenses

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The following table provides a breakout of our research and development expenses during the periods indicated, including percent changes (dollar amounts in thousands):

Pacira BioSciences, Inc.

| Q3 2023 Form 10-Q | Page 39

Three Months Ended

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

June 30, % Increase / (Decrease)

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

September 30, % Increase / (Decrease)

2023 2022 2023 2022

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% of total revenues 13 % 12 % 12 % 14 %

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

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.

Total research and development expense increased 7% and decreased 16% in the three and nine months ended September 30, 2023 versus 2022, respectively.

Clinical and preclinical development expense decreased 19% and 56% in the three and nine months ended September 30, 2023 versus 2022, respectively, due to the completion of two EXPAREL lower extremity nerve block trials in bunionectomy and TKA in the third quarter of 2022, toxicology studies that are near completion for product candidates, partially offset by start-up costs for both ZILRETTA shoulder and iovera° spasticity trials.

Product development and manufacturing capacity expansion expense increased 30% and 52% in the three and nine months ended September 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 (for which a prior approval supplement was submitted to the FDA in October 2023 with an anticipated PDUFA action date in February 2024), as well as new product development costs related to gene therapy.

Regulatory and other expense increased 20% and 29% in the three and nine months ended September 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 25% and 22% in the three and nine months ended September 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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Stock-based compensation expense relates to the costs of stock option grants, RSU awards and our ESPP.

Pacira BioSciences, Inc.

| Q3 2023 Form 10-Q | Page 40

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

Three Months Ended

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

June 30, % Increase / (Decrease)

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

September 30, % Increase / (Decrease)

2023 2022 2023 2022

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% of total revenues 41 % 37 % 41 % 39 %

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.

Total selling, general and administrative expense increased 11% and 7% in the three and nine months ended September 30, 2023 versus 2022, respectively.

Sales and marketing expense increased 14% and 8% in the three and nine months ended September 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.

In 2023, we also 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 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.

We also announced a new grant to the ASA’s Charitable Foundation to advance the medical specialty of anesthesiology and pain medicine, facilitate best in-class clinician education and improve patient care.

General and administrative expense increased 13% and 10% in the three and nine months ended September 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 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

Stock-based compensation decreased 3% and 4% for the three and nine months ended September 30, 2023 versus 2022, respectively, primarily due to a decrease in the number of equity awards outstanding for selling, general and administrative personnel.

Amortization of Acquired Intangible Assets

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Three Months Ended

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

June 30, % Increase / (Decrease)

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

September 30, % Increase / (Decrease)

2023 2022 2023 2022

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

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):

Pacira BioSciences, Inc.

| Q3 2023 Form 10-Q | Page 41

Contingent Consideration Charges (Gains), Restructuring Charges and Other

The following table provides a summary of the costs related to the contingent consideration, acquisition-related charges and restructuring charges during the periods indicated, including percent changes (dollar amounts in thousands):

Three Months Ended

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

June 30, % Increase / (Decrease)

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

September 30, % Increase / (Decrease)

2023 2022 2023 2022

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

Contingent consideration 2,793 (1,043) N/A (3,847) (23,394) (84)%

Acquisition-related charges $ 390 $ 1,532 (75)% $ 1,588 $ 10,162 (84)%

Restructuring charges 173 — N/A 1,109 — 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.

Total contingent consideration charges (gains), restructuring charges and other $ 3,356 $ 489 100% + $ (1,150) $ (13,232) (91)%

Total contingent consideration charges (gains), restructuring charges and other increased by more than 100% in the three months ended September 30, 2023 versus 2022 and decreased 91% in the nine months ended September 30, 2023 versus 2022.

During the three months ended September 30, 2023, we recognized contingent consideration charges (gains), restructuring charges and other of $3.4 million in charges, which were primarily driven by an increase in the contingent consideration milestones for the Flexion Acquisition due to market volatility which affects the liability’s present value.

During the nine months ended September 30, 2023, we recognized contingent consideration charges (gains), restructuring charges and other of $1.2 million in gains.

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.

The contingent consideration gain was 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 our incremental borrowing rate.

Partially offsetting these gains were acquisition-related charges primarily related to vacant and underutilized Flexion leases.

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

During the three months ended September 30, 2022, we recognized contingent consideration charges (gains), restructuring charges and other of $0.5 million in charges.

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

During the nine months ended September 30, 2022, we recognized contingent consideration charges (gains), restructuring charges and other of $13.2 million in gains.

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 Flexion merger agreement and due to the reduced probability of meeting the MyoScience contingent consideration milestones by December 31, 2023, the expiration date for achieving those milestones .

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

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

Pacira BioSciences, Inc.

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Three Months Ended

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

June 30, % Increase / (Decrease)

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

September 30, % Increase / (Decrease)

2023 2022 2023 2022

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Total other expense, net $ (1,120) (19,220) (94)% $ (26,526) $ (38,547) (31)%

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.

Total other expense, net decreased 94% and 31% in the three and nine months ended September 30, 2023 versus 2022, respectively.

The 65% and 42% decrease in interest expense during the three and nine months ended September 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.

The increases in interest income in the three and nine months ended September 30, 2023 versus the comparable periods in 2022 were due to higher interest rates and overall investment balances.

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

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

Income Tax Expense

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Three Months Ended

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

June 30, % Increase / (Decrease)

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

September 30, % Increase / (Decrease)

2023 2022 2023 2022

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Effective tax rate 35 % 133 % 39 % 17 %

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.

The effective tax rates were 35% and 39% for the three and nine months ended September 30, 2023, respectively.

The effective tax rates were 133% and 17% for the three and nine months ended September 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 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.

The effective tax rate for the three and nine months ended September 30, 2023 include costs related to non-deductible stock-based compensation and non-deductible executive compensation, partially offset by credits and a fair value adjustment for the Flexion contingent consideration.

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

operating results and U.S.

capital losses, partially offset by benefits for a first quarter milestone payment to SkyePharma Holding, Inc.

(now a subsidiary of Vectura Group plc),

Pacira BioSciences, Inc.

| Q3 2023 Form 10-Q | Page 43

or Skyepharma, a fair value adjustment for Flexion contingent consideration and the impact of stock-based compensation adjustments.

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 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.

As of September 30, 2023, we had an accumulated deficit of $131.7 million, cash and cash equivalents and available-for-sale investments of $235.2 million and working capital of $353.6 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):

Six Months Ended

Nine Months Ended

September 30,

Condensed Consolidated Statements of Cash Flows Data:

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Operating Activities

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.

During the nine months ended September 30, 2023, net cash provided by operating activities was $107.1 million, compared to $103.2 million during the nine months ended September 30, 2022.

The increase of $3.8 million was attributable to increased interest income and lower interest expense, partially offset by the payment of a $13.0 million termination fee relating to a licensing agreement.

Investing Activities

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.

During the nine months ended September 30, 2023, net cash provided by investing activities was $69.2 million, which reflected proceeds from $89.3 million of available-for-sale investment sales (net of purchases), partially offset by purchases of fixed assets of $13.4 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 nine months ended September 30, 2022, net cash used in investing activities was $236.4 million, which reflected $166.8 million of available-for-sale investment purchases (net of maturities), a $32.0 million contingent consideration milestone payment that had been achieved in the fourth quarter of 2021 associated with our 2007 acquisition of Pacira Pharmaceuticals, Inc.

from Skyepharma, purchases of fixed assets of $24.6 million for fill lines for our products and equipment for an EXPAREL capacity expansion project at our Science Center Campus in San Diego, California and purchases of equity and debt investments of $13.0 million.

Financing Activities

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 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

During the nine months ended September 30, 2023, net cash used in financing activities was $181.3 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 and $30.6 million repayments of TLA Term Loan principal, partially offset by the net proceeds from the TLA Term Loan of $149.6 million, proceeds from 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 on the TLA Term Loan and TLB Term Loan.

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| Q3 2023 Form 10-Q | Page 44

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.

During the nine months ended September 30, 2022, net cash used in financing activities was $343.0 million, which primarily consisted of a $192.6 million principal repayment of the 3.375% convertible senior notes due 2024 (the “Flexion 2024 Notes”) as part of a repurchase offer to the holders of the Flexion 2024 Notes that was triggered by the Flexion Acquisition, $157.0 million to settle the 2022 Notes that matured on April 1, 2022 and $18.8 million of scheduled repayments of Term Loan principal, partially offset by $23.5 million of proceeds from the exercise of stock options and $1.8 million from the issuance of common stock through our ESPP.

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).

On March 31, 2023, we entered into a credit agreement (the “TLA Credit Agreement”) to refinance the indebtedness outstanding under our 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 and matures on March 31, 2028.

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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%.

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.

During the nine months ended September 30, 2023, we made a scheduled principal payment of $2.8 million as well as $27.8 million of voluntary principal prepayments.

Due to voluntary principal prepayments of $27.8 million made during the three months ended September 30, 2023, we are not required to make further principal payments for the remainder of 2023 and 2024.

As of September 30, 2023, borrowings under the TLA Term Loan consisted entirely of term benchmark borrowings at a rate of 8.47%.

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 June 30, 2023, we were in compliance with all financial covenants under the TLA Credit Agreement.

As of September 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 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.

During the nine months ended September 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 mature on August 1, 2025.

At June 30, 2023, the outstanding principal on the 2025 Notes was $402.5 million.

At September 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 November 2021, as part of the Flexion Acquisition, we assumed $201.3 million in aggregate principal amount of the Flexion 2024 Notes.

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

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

At 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.

The Flexion 2024 Notes have a maturity date of May 1, 2024, are unsecured, and accrue interest at a rate

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| Q3 2023 Form 10-Q | Page 45

of 3.375% per annum, payable semi-annually on May 1 st and November 1 st of each year.

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

At September 30, 2023, the outstanding principal on the Flexion 2024 Notes was $8.6 million.

See Note 8, Debt , to our condensed consolidated financial statements included herein for further discussion.

Future Capital Requirements

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• the timing of and extent to which the holders of our Notes elect to convert their Notes, the timing of principal and interest payments on our TLA Term Loan and the timing and impact of increases to the variable interest rate on our TLA Term Loan borrowings in accordance with the terms of the TLA Credit Agreement;

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

• the cost and timing of expanding and maintaining our manufacturing facilities, including the current EXPAREL capacity expansion project at our Science Center Campus in San Diego, California (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 costs and our ability to successfully continue to expand the commercialization of EXPAREL, ZILRETTA and iovera°, including markets 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 (for which a prior approval supplement was submitted to the FDA in October 2023 with an anticipated PDUFA action date in February 2024) 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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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.

Pacira BioSciences, Inc.

| Q3 2023 Form 10-Q | Page 46

Contractual Obligations

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

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

What changed 10-Q

Item 1. Financial Statements