Pacira Acquires Flexion for $425 Million to Expand Non-Opioid Painkiller Portfolio

Pacira Biosciences is acquiring Burlington, MA-based Flexion Therapeutics in a deal worth over $425 million, the two companies revealed on Monday. The move will help Pacira diversify its offering of non-opioid pain control treatments. 

Pacira will pay $8.50 per Flexion share in cash, which is a 47% premium on Flexion’s closing price last Friday.

The deal gives Pacira access to Zilretta, Flexion’s FDA-approved treatment for managing osteoarthritis (OA) knee pain. The company will also bag Phase 1 pipeline candidates FX201, a gene therapy for OA, and FX301, a treatment for post-operative pain. 

“This acquisition is a major milestone in our strategy to build a robust offering of novel, non-opioid treatments to improve patient care along the neural pain pathway while simultaneously providing us with a complementary commercial asset in Zilretta for the treatment of OA knee pain,” said Dave Stack, Chairman, and CEO of Pacira.

A Profitable Deal

What makes the deal extra sweet is the chance for it to nearly double in value, as Pacira will also issue a contingent value right (CVR) per share bought. The CVR could net Flexion stockholders an extra $8 per share if certain milestones are met within the decade before December 31, 2030. 

Sales milestones include payments of $1, $2, and $3 per share if Zilretta sales reach $250 million, $375 million, and $500 million respectively within a calendar year.

On the regulatory end, FDA approvals of FX201 and FX301 could potentially deliver $1 each.

Expectations should be managed as Flexion on the same day announced Q3 2021 sales of Zilretta in the range of $21 million to $23 million — a far cry from the hundreds of millions Pacira expects it to make in the future.

Flexion blamed the disappointing sales on “temporary disruptions from rebate program modifications,” “pandemic-related challenges,” and “unanticipated manufacturing batch failures” that resulted in smaller order sizes and product recalls from distributors.

Moving Beyond Exparel

Pacira hopes its takeover of Lexion will shore up its pain portfolio as its main product faces heat from generic competition.

Pacira’s lead product Exparel (bupivacaine), generated $413.3 million in 2020. In the second quarter of 2021, it raised $130.1 million, making up almost all of the company’s $135 million in sales. 

However, eVenus Pharmaceutical Laboratories recently filed for FDA approval to manufacture and sell a generic version of Exparel, at the same time challenging Pacira’s patent of the drug. Pacira has said that it will “vigorously defend its intellectual property rights to Exparel.”

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Joy Lin

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