Pacira BioSciences, Inc. - Annual Report: 2019 (Form 10-K)

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Expanding the use of EXPAREL and iovera° for opioid-sparing pain management: As the only opioid-free, long-acting local and regional analgesic approved for infiltration, field blocks and interscalene brachial plexus nerve block, we believe EXPAREL is well-positioned to continue delivering strong sustainable growth from multiple sources. We are seeing increased use within the anesthesiology community through EXPAREL-based regional approaches that are enabling the shift of complex, painful procedures to the hospital outpatient and ambulatory settings. Our partnership with DePuy Synthes Sales Inc., or DePuy Synthes, part of the Johnson & Johnson family of companies, has established the role of EXPAREL as the foundation of opioid-sparing protocols for painful orthopedic procedures, including shoulder, hip fracture, joint reconstruction, and spine surgeries. We are expanding the body of clinical evidence through Phase 4 studies in key surgical settings, such as C-section and spine. In addition, we are advancing clinical and regulatory activities to expand the EXPAREL label to include the pediatric and lower extremity nerve block settings. For iovera°, we are focusing on iovera° plus EXPAREL as a multimodal procedural solution for total knee arthroplasty, or TKA, as well as drug-free, opioid-free, surgery-free pain management for osteoarthritis of the knee.

•	Pursuing innovative acquisition targets that align with our strategy: We believe EXPAREL, iovera° and the DepoFoam platform offer a strong foundation to address the opioid epidemic. Building on these company assets, we are also pursuing innovative acquisition targets ranging from devices, therapeutics, cell therapies and regenerative

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Advancing a pipeline of new clinical candidates: We are developing a pipeline based on our DepoFoam platform, our established safe and effective multivesicular liposomal drug delivery technology. DepoFoam consists of microscopic, spherical, lipid-based particles composed of a honeycomb of numerous, non-concentric, internal aqueous chambers containing the encapsulated drug. DepoFoam provides flexible delivery and can be designed to offer an immediate release dose followed by sustained delivery. We are advancing a program for the intrathecal delivery of a DepoFoam-based local anesthetic as a potential alternative to the use of subarachnoid opioids delivered by pumps and catheters and DepoDexmedetomidine for end-of-life pain and painful conditions in the elderly.

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Expanding the use of EXPAREL in key surgical settings. We are expanding the clinical evidence for EXPAREL through Phase 4 clinical trials across several surgical specialties. We have published positive results from a Phase 4 multicenter, randomized, controlled trial, or RCT, in TKA in the Journal of Arthroplasty.  Positive findings from a multicenter RCT in C-section were presented at the most recent annual meeting of the Society for Obstetric Anesthesia and Perinatology (SOAP), and we recently reported positive topline results from a follow-on Phase 4 study in C-section procedures that compared an opioid-free EXPAREL arm to an opioid-based standard of care arm. EXPAREL is being incorporated into an increasing number of Enhanced Recovery After Surgery, or ERAS, protocols from major academic centers for a wide range of procedures. In addition, we are advancing clinical and regulatory activities to support the future expansion of EXPAREL to the pediatric and lower extremity nerve block settings. Regulatory initiatives are also advancing in new global markets, such as Europe, Canada and China.

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Expanding access to EXPAREL and driving education and awareness around the need for opioid-sparing strategies. New payer policies and benefits are supporting this migration to realize cost savings while enhancing patient care through the use of opioid-sparing protocols. The Centers for Medicare and Medicaid Services, or CMS, is providing Medicare reimbursement for EXPAREL when administered in an Ambulatory Surgery Center, or ASC, through the product-specific Healthcare Common Procedure Coding System (HCPCS) code of C9290. Effective January 1, 2020, CMS removed total hip arthroplasty and six spinal procedures from its inpatient-only list, making these procedures eligible for payment by Medicare in the hospital outpatient setting. The final CMS rule for 2020 also added TKA and several other procedures to its listing of ASC covered procedures. In addition, we continue to advance our Choices Matter national educational campaign, aimed at empowering patients to proactively discuss postsurgical pain management, including non-opioid options, with their healthcare providers.

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Partnering with those who share our commitment to innovative opioid-sparing procedural solutions. We have a growing network of strategic collaborations to expand education on the importance of non-opioid multimodal alternatives for post-surgical pain management and broaden our commercial reach. These include agreements with industry partners, as well as healthcare providers and hospital systems to support their implementation of opioid-sparing enhanced recovery protocols. In January 2017, we formed a partnership with DePuy Synthes to support the promotion, education and training of EXPAREL in orthopedics. We are collaborating on national and regional training initiatives with large anesthesia physician practices, such as MEDNAX, Inc. and Envision Physician Services. Our growing coalition of collaborators also includes Aetna, the American Association of Oral and Maxillofacial Surgeons, or AAOMS, the American College of Surgeons, the American Society for Enhanced Recovery, Cancer Treatment Centers of America, the Illinois Surgical Quality Improvement Collaborative, WellStar Health System and Shatterproof.org.

•	provides long-lasting local or regional analgesia;

•	is a ready-to-use formulation;

•	expands easily with saline or lactated Ringer’s solution to reach a desired volume;

•	leverages existing interscalene brachial plexus nerve block, field block and infiltration administration techniques; and

•	facilitates treatment of both small and large surgical sites.

•	delayed the median time to rescue analgesic use (opioids) to 15 hours for patients treated with EXPAREL versus one hour for patients treated with placebo;

•	significantly increased the percentage of patients requiring no opioid rescue medication through 72 hours post-surgery to 28%, compared to 10% for placebo;

•	resulted in 45% less opioid usage through 72 hours post-surgery compared to placebo; and

•	increased the percentage of patients who were pain free at 24 hours post-surgery compared to placebo.

•	decreased total opioid consumption by 78% (p<0.0001) from zero to 48 hours after surgery;

•	reduced pain scores by 46% versus placebo (p<0.0001); and

•	allowed 13% of patients who received EXPAREL to remain opioid-free for 48 hours after surgery (p<0.01) compared to zero patients in the placebo arm.

•	decreased total opioid consumption by 78% (p=0.0048) from zero to 48 hours after surgery;

•	reduced pain scores by 14% (p=0.0381) from 12 to 48 hours after surgery; and

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•	allowed 10% of patients in the EXPAREL arm to remain opioid-free through 48 and 72 hours (compared to zero patients in the bupivacaine arm; p<0.01).

•	Comparable pain control with a reduction in total opioid consumption with EXPAREL plus bupivacaine HCl versus bupivacaine HCl:

◦	52% reduction through 72 hours, (p=0.0117)

◦	49% reduction at one week (p=0.0175)

◦	41% reduction at two weeks (trending toward significance; p=0.0542)

•	More than a two-fold increase in the percentage of opioid-spared patients with EXPAREL versus bupivacaine HCl (defined as patients who took no more than one oxycodone 10mg tablet, or equivalent, with no opioid-related side effects through 72 hours; p=0.0012)

•	provides effective pain control without the need for expensive and difficult-to-use delivery technologies that extend the duration of action for bupivacaine, such as elastomeric bags, or opioids administered through patient-controlled analgesia, or PCA, when used as part of a multimodal postsurgical pain regimen;

•	reduces the need for patients to be constrained by elastomeric bags and PCA systems, which are barriers to earlier ambulation and may introduce catheter-related issues, including infection; and

•	promotes maintenance of early postsurgical pain management, which may reduce the time spent in the intensive care unit.

•	84% did not require any additional opioid prescriptions beyond the initial seven-day prescription provided at discharge (while nationally, 38% of knee replacement patients are still taking opioids two months after surgery)

•	84% of patients were same-day discharged to home, following their joint replacement

•	Patients reported high satisfaction with their perioperative experience (98% were highly satisfied with their pain management)

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•	Comparable or lower complication rates to nationally reported rates

•	Decrease in opioid consumption, expressed in oral morphine equivalent dosing (MED), among Medicare and commercial insurance patients (105 mg MED and 81 mg MED reductions, respectively; p<0.0001)

•	Decrease in average hospital LOS by 0.7 days in both the Medicare and commercial insurance groups (p<0.0001)

•	Decrease in total hospitalization costs in the Medicare population (-$561; p<0.0001)

•	Increase in likelihood to be discharged home in both the Medicare and commercial insurance groups (1.66 and 1.57, respectively; p<0.0001)

•	Fewer total prescribed opioid tablets including refills, compared to patients in the non-EXPAREL group (6.4 tablets vs. 15.5 tablets, respectively; p<0.0001)

•	Fewer additional opioid prescriptions compared to the non-EXPAREL group (3.3% of patients required a refill vs. 7.7% of patients, respectively)

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•	The daily morphine equivalent was significantly lower at 72 hours (p<0.05), 6 weeks (p<0.05) and 12 weeks (p<0.05), with an overall 35 percent reduction in daily morphine equivalents across the 12-week postoperative period in the iovera° treatment group.

•	Patients who were administered iovera° were far less likely to take opioids six weeks after surgery. The number of patients taking opioids six weeks after TKA in the control group was three times the number of patients taking opioids in the cryoanalgesia group (14% vs. 44%, p<0.01).

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

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

•	iovera° is repeatable;

•	The iovera° technology does not risk damage to the surrounding tissue;

•	iovera° is a convenient handheld device with a single-use procedure-specific smart tip; and

•	iovera° can be delivered precisely using ultrasound guidance or an anatomical landmark.

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•	providing publications and abstracts showing clinical efficacy and safety, health outcomes and review articles;

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working in tandem with hospital staff, such as anesthesiologists, surgeons, heads of quality, pharmacists, executives and registered nurses, to provide access and resources for drug utilization or medication use evaluations and health outcomes studies, which provide retrospective and prospective analyses for our hospital customers using their own hospital data to demonstrate the true cost of opioid-based postsurgical pain control;

•	working with KOLs and advisory boards to address topics of best practice techniques as well as guidelines and protocols for the use of our products, meeting the educational and training needs of our physician, surgeon, anesthesiologist, pharmacist and registered nurse customers;

•	undertaking education initiatives such as center of excellence programs; preceptorship programs; opioid-sparing and ERAS pain protocols and predictive models for enhanced patient care; interactive discussion forums; patient education platforms leveraging public relations, advocacy partnerships and public affairs efforts where appropriate; web-based training and virtual launch programs;

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collaborating with healthcare providers towards improving the knowledge and management of pain in surgical and osteoarthritis patients with a focus on opioid risk and non-opioid alternatives and engaging our field-based medical teams in system-wide partnerships to address the national opioid epidemic, with a goal of studying alternative postsurgical pain management options that focus on optimization and opioid alternative strategies; and

•	facilitating reimbursement and the shift of procedures to hospital outpatient and ASC sites of care.

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•	$10.0 million upon the first commercial sale in the U.S. (met April 2012);

•	$4.0 million upon the first commercial sale in the United Kingdom, France, Germany, Italy or Spain;

•	$8.0 million when annual net sales collected reach $100.0 million (met September 2014);

•	$8.0 million when annual net sales collected reach $250.0 million (met June 2016); and

•	$32.0 million when annual net sales collected reach $500.0 million.

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•	completion of preclinical laboratory and animal testing and formulation studies in compliance with the FDA’s Good Laboratory Practice regulations (21 CFR 58);

•	submission to the FDA of an Investigational New Drug, or IND, application for human clinical testing, which must become effective before human clinical trials may begin for unapproved use in the U.S.;

•	approval by an independent Institutional Review Board, or IRB, at each clinical trial site before each trial may be initiated;

•	performance of adequate and well-controlled human clinical trials in accordance with the FDA’s Good Clinical Practices, or GCP, to establish the safety and efficacy of the proposed drug product for each intended use;

•	completion of process validation, quality product release and stability;

•	submission of a New Drug Application, or NDA, to the FDA;

•	satisfactory completion of an FDA pre-approval inspection of the product’s manufacturing facility or facilities to assess compliance with cGMP requirements and to ensure that the facilities, methods and controls are adequate to preserve the drug’s identity, quality and purity;

•	satisfactory completion of an FDA advisory committee review, if applicable; and

•	review and approval by the FDA of the NDA.

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Phase 1: Sponsors initially conduct clinical trials in a limited population, either patients or healthy volunteers, to test the product candidate for safety, dose tolerance, absorption, metabolism, distribution, excretion and clinical pharmacology, and, if possible, to gain early evidence of effectiveness. In the cases of some products for severe or life-threatening diseases, especially when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing often is conducted only on patients having the specific disease.

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Phase 2: Sponsors conduct clinical trials generally in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted indications and to determine dose tolerance, optimal dosage and dosing schedule. Sponsors may conduct multiple Phase 2 clinical trials to obtain information prior to beginning larger and more extensive Phase 3 clinical trials.

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Phase 3: These include expanded controlled and uncontrolled trials, including pivotal clinical trials. When Phase 2 evaluations suggest the effectiveness of a dose range of the product and acceptability of such product’s safety profile, sponsors undertake Phase 3 clinical trials in larger patient populations to obtain additional information needed to evaluate the overall benefit and risk balance of the drug and to provide an adequate basis to develop labeling.

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•	restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;

•	fines, warning letters or holds on post-approval clinical trials;

•	refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product license approvals;

•	product seizure or detention, or refusal to permit the import or export of products; or

•	injunctions or the imposition of civil or criminal penalties.

•	QSRs, which require manufacturers, including third‑party manufacturers, to follow stringent design, testing, documentation and other quality assurance procedures during product design and throughout the manufacturing process;

•	Labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or off‑label uses; and

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•	Medical device reporting regulations, which require that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur.

•	restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;

•	fines, warning letters or holds on post-approval clinical trials;

•	the potential withdrawal of 510(k) clearance or other approvals that were previously granted;

•	refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product license approvals;

•	product seizure or detention, or refusal to permit the import or export of products;

•	injunctions or the imposition of civil or criminal penalties; or

•	requiring us to repair, replace and/or refund the cost of any medical device we have manufactured or distributed.

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•	create market demand for EXPAREL through our marketing and sales activities and other arrangements established for the promotion of EXPAREL;

•	train, deploy and support a qualified sales force;

•	secure formulary approvals for EXPAREL at a substantial number of targeted hospitals and ASCs;

•	manufacture EXPAREL in sufficient quantities in compliance with requirements of the FDA and similar foreign regulatory agencies and at acceptable quality and pricing levels in order to meet commercial demand;

•	implement and maintain agreements with wholesalers and distributors on commercially reasonable terms;

•	receive adequate levels of coverage and reimbursement for EXPAREL from commercial health plans and governmental health programs;

•	maintain compliance with regulatory requirements;

•	obtain regulatory approvals for additional indications for the use of EXPAREL;

•	ensure that our entire supply chain efficiently and consistently delivers EXPAREL to our customers; and

•	maintain and defend our patent protection and regulatory exclusivity for EXPAREL.

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•	changes in the standard of care for the targeted indications for EXPAREL, which could reduce the marketing impact of any claims that we can make;

•	the relative efficacy, convenience and ease of administration of EXPAREL;

•	the prevalence and severity of adverse events associated with EXPAREL;

•	cost of treatment versus economic and clinical benefit, both in absolute terms and in relation to alternative treatments;

•	the availability of adequate coverage or reimbursement by third parties, such as insurance companies and other healthcare payers, and by government healthcare programs, including Medicare and Medicaid;

•	the extent and strength of our marketing and distribution of EXPAREL;

•	the safety, efficacy and other potential advantages over, and availability of, alternative treatments, including, in the case of EXPAREL, a number of products already used to treat pain in the hospital setting; and

•	distribution and use restrictions imposed by the FDA or to which we agree as part of a mandatory risk evaluation and mitigation strategy or voluntary risk management plan.

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•	not effectively distribute or support our products;

•	not provide us with accurate or timely information regarding their inventories, the number of accounts using our products or complaints about our products;

•	fail to comply with their obligations to us;

•	fail to comply with laws and regulations to which they are subject, whether in the U.S. or in foreign jurisdictions;

•	reduce or discontinue their efforts to sell or promote our products; or

•	cease operations.

•	continue the hiring and training of an effective commercial organization for the commercialization of EXPAREL and iovera°, and establish appropriate systems, policies and infrastructure to support that organization;

•	continue to establish and maintain effective relationships with distributors and commercial partners for the promotion and sale of our products;

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•	ensure that our distributors, partners, suppliers, consultants and other service providers successfully carry out their contractual obligations, provide high quality results and meet expected deadlines;

•	manage our development efforts and clinical trials effectively;

•	expand our manufacturing capabilities and effectively manage our co-production arrangement with Thermo Fisher;

•	continue to carry out our own contractual obligations to our licensors and other third parties; and

•	continue to improve our operational, financial and management controls, reporting systems and procedures.

•	loss of revenue from decreased demand for our products and/or product candidates;

•	impairment of our business reputation or financial stability;

•	costs of related litigation;

•	substantial monetary awards to patients or other claimants;

•	diversion of management attention;

•	loss of revenues;

•	withdrawal of clinical trial participants and potential termination of clinical trial sites or entire clinical programs; and

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•	the inability to commercialize our products and/or product candidates.

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•	significant capital expenditures;

•	difficulty or inability to secure financing to fund development activities for such development, acquisition or in-licensed products or technologies;

•	incurrence of substantial debt or dilutive issuances of securities to pay for development, acquisition or in-licensing of new products;

•	the successful integration of acquired products, businesses or technologies into our operations, and achieving the expected benefits and synergies from such acquisitions;

•	disruption of our business and diversion of our management’s time and attention;

•	higher than expected development, acquisition or in-license and integration costs;

•	exposure to unknown liabilities;

•	difficulty and cost in combining the operations and personnel of any acquired businesses with our operations and personnel;

•	inability to retain key employees of any acquired businesses;

•	difficulty entering markets in which we have limited or no direct experience;

•	difficulty in managing multiple product development programs; and

•	inability to successfully develop new products or clinical failure.

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•	regulatory authorities may require the addition of unfavorable labeling statements, specific warnings or contraindications (including boxed warnings);

•	regulatory authorities may suspend or withdraw their approval of the product, or require it to be removed from the market;

•	regulatory authorities may impose restrictions on the distribution or use of the product;

•	we may be required to change the way the product is administered, conduct additional clinical trials, reformulate the product, change the labeling of the product or change or obtain re-approvals of manufacturing facilities;

•	sales of the product may be significantly decreased from projected sales;

•	we may be subject to government investigations, product liability claims and litigation; and

•	our reputation may suffer.

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•	the Federal Anti-Kickback Law, which prohibits persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce either the referral of an individual or furnishing or arranging for a good or service for which payment may be made under federal health care programs such as Medicare and Medicaid;

•	other Medicare laws and regulations that prescribe the requirements for coverage and payment for services performed by our customers, including the amount of such payment;

•	the Federal False Claims Act, which imposes civil and criminal liability on individuals and entities who submit, or cause to be submitted, false or fraudulent claims for payment to the government;

•	the Federal False Statements Act, which prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with delivery of or payment for health care benefits, items or services; and

•	various state laws that impose similar requirements and liability with respect to state healthcare reimbursement and other programs.

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•	product recall or seizure;

•	suspension or withdrawal of an approved product from the market;

•	interruption of production;

•	reputational concerns of our customers or the medical community;

•	operating restrictions;

•	warning letters;

•	injunctions;

•	refusal to permit import or export of an approved product;

•	refusal to approve pending applications or supplements to approved applications that we submit;

•	denial of permission to file an application or supplement in a jurisdiction;

•	consent decrees;

•	suspension or termination of ongoing clinical trials;

•	fines and other monetary penalties;

•	criminal prosecutions; and

•	unanticipated expenditures.

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•	we may not have been the first to make the inventions covered by each of our pending patent applications and issued patents;

•	we may not have been the first to file patent applications for these inventions;

•	others may independently develop similar or alternative technologies or duplicate any of our product candidates or technologies;

•	it is possible that none of the pending patent applications will result in issued patents;

•	the issued patents covering our product candidates may not provide a basis for commercially viable active products, may not provide us with any competitive advantages, may not have sufficient scope or strength to protect the technologies they were intended to protect or may be challenged by third parties;

•	others may design around our patent claims to produce competitive products that fall outside the scope of our patents;

•	we may not develop or in-license additional proprietary technologies that are patentable;

•	patents of others may have an adverse effect on our business; or

•	competitors may infringe our patents and we may not have adequate resources to enforce our patents.

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•	infringement and other intellectual property claims which, with or without merit, can be expensive and time consuming to litigate and can divert management’s attention from our core business;

•	substantial damages for past infringement which we may have to pay if a court decides that our product infringes on a competitor’s patent;

•	a court prohibiting us from selling or licensing our product unless the patent holder licenses the patent to us, which it would not be required to do;

•	if a license is available from a patent holder, we may have to pay substantial royalties or grant cross licenses to our patents; and

•	redesigning our processes so they do not infringe, which may not be possible or could require substantial funds and time.

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•	manufacture commercial quantities of EXPAREL and iovera° at acceptable cost levels; and

•	continue to develop a commercial organization and the supporting infrastructure required to successfully market and sell both EXPAREL and iovera°.

•	continue to fund our operations;

•	continue our efforts to hire additional personnel and build a commercial infrastructure to commercialize EXPAREL and iovera°

•	qualify, outsource or build additional commercial-scale manufacturing of our products under cGMP;

•	in-license and develop additional product candidates; and

•	refinance our 2.375% convertible senior notes, due April 2022.

•	the costs of maintaining a commercial organization to sell, market and distribute EXPAREL and iovera°

•	the success of the commercialization of EXPAREL and iovera°

•	the cost and timing of manufacturing sufficient supplies of EXPAREL and iovera° to meet customer demand, including the cost of expanding our manufacturing facilities to produce EXPAREL and iovera°

•	the rate of progress and costs of our efforts to prepare for the submission of an NDA, sNDA or 510(k) pre-market notification for any product candidates that we may in-license or acquire in the future, and the potential that we may need to conduct additional clinical trials to support applications for regulatory approval;

•	the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights associated with our product candidates, including any such costs we may be required to expend if our licensors are unwilling or unable to do so;

•	the effect of competing technological and market developments;

•	the terms and timing of any collaborative, licensing, co-promotion or other arrangements that we may establish; and

•	the potential that we may be required to file a lawsuit to defend our patent rights or regulatory exclusivities from challenges by companies seeking to market generic versions of extended-release liposome injection of bupivacaine or a cryoanalgesic device that infringes on the various patents covering iovera°.

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•	the level of underlying hospital and ASC demand for EXPAREL and iovera° and end-user buying patterns;

•	maintaining our existing manufacturing facilities for EXPAREL and iovera°, expanding our manufacturing capacity and constructing a second suite for the manufacture of EXPAREL with our co-production partner, Thermo Fisher, including installing specialized processing equipment for the manufacturing of EXPAREL;

•	our execution of other collaborative, licensing, distribution, manufacturing or similar arrangements and the timing of payments we may make or receive under these arrangements;

•	variations in the level of expenses related to our future development programs;

•	any product liability or intellectual property infringement lawsuit in which we may become involved; and

•	regulatory developments, lawsuits and investigations affecting EXPAREL, iovera° or the product candidates of our competitors;

•	failure to implement our business plans for the combined businesses and consolidation or expansion of production capacity as planned and where applicable;

•	unexpected losses of key employees, customers or suppliers of our acquired companies and businesses;

•	unanticipated issues in conforming our acquired companies’ and businesses’ standards, processes, procedures and controls with our operations;

•	coordinating new product and process development;

•	increasing the scope, geographic diversity and complexity of our operations;

•	diversion of management’s attention from other business concerns;

•	adverse effects on our or our acquired companies’ and businesses’ existing business relationships;

•	unanticipated changes in applicable laws and regulations;

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•	operating risks inherent in our acquired companies’ and businesses’ business and operations;

•	unanticipated expenses and liabilities;

•	potential unfamiliarity with our acquired companies and businesses technology, products and markets, which may place us at a competitive disadvantage; and

•	other difficulties in the assimilation of our acquired companies and businesses operations, technologies, products and systems.

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•	the commercial success of EXPAREL and iovera°

•	results of clinical trials of our products, product candidates or those of our competitors;

•	changes or developments in laws or regulations applicable to our products or product candidates;

•	introduction of competitive products or technologies;

•	failure to meet or exceed financial projections we provide to the public;

•	actual or anticipated variations in quarterly operating results;

•	failure to meet or exceed the estimates and projections of the investment community;

•	the perception of the pharmaceutical and medical device industry by the public, legislatures, regulators and the investment community;

•	regulatory concerns or government actions

•	general economic and market conditions and overall fluctuations in U.S. equity markets;

•	developments concerning our sources of manufacturing supply;

•	disputes or other developments relating to patents or other proprietary rights;

•	additions or departures of key scientific or management personnel;

•	the extent to which we acquire or invest in products, businesses and technologies;

•	issuances of debt, equity or convertible securities;

•	changes in the market valuations of similar companies; and

•	the other factors described in this “Risk Factors” section.

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•	authorizing the issuance of “blank check” preferred stock, the terms of which may be established and shares of which may be issued without stockholder approval;

•	prohibiting stockholder action by written consent, thereby requiring all stockholder actions to be taken at a meeting of our stockholders;

•	eliminating the ability of stockholders to call a special meeting of stockholders; and

•	establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon at stockholder meetings.

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In December 2019, we announced positive results from our Phase 3 PLAY study of EXPAREL administered as a single-dose infiltration in pediatric patients undergoing spinal or cardiac surgeries. Overall findings were consistent with the pharmacokinetic and safety profiles for adult patients with no safety concerns identified at a dose of 4 mg/kg. These results will provide the foundation for our sNDA submission in the first half of 2020 to the FDA seeking expansion of the EXPAREL label to include children aged six and over.

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In January 2020, we announced a collaboration with Envision Physician Services to train anesthesiology clinicians on ultrasound-guided regional anesthesia techniques utilizing long-acting local anesthetics like EXPAREL via a series of interactive workshops held across the country. The program supports ongoing efforts by both organizations to advance the delivery of high-quality, patient-centered care.

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In January 2020, we announced positive results from our Phase 4 opioid-free CHOICE study of EXPAREL in patients undergoing C-section. The study achieved its primary endpoint with a statistically significant reduction in total postsurgical opioid consumption while maintaining pain scores through 72 hours (p≤0.001). EXPAREL demonstrated statistical significance for the key secondary endpoint of a reduction in the incidence and severity of itching for 72 hours after surgery (p≤0.05). Full study results will be submitted for publication in the peer-reviewed medical literature later this year.

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•	our ability to successfully continue to expand the commercialization of EXPAREL, including outside of the U.S.;

•	the costs of successfully integrating MyoScience (now known as Pacira CryoTech) into our existing business and expanding the commercialization of iovera°

•	the cost and timing of expanding our manufacturing facilities for EXPAREL and other product candidates, including the construction of an additional manufacturing suite at Thermo Fisher’s facility in Swindon, England;

•	the cost and timing of potential milestone payments to MyoScience security holders, which could be up to an aggregate of $73.0 million if certain regulatory and commercial milestones are met, which includes two milestone payments totaling $15.0 million to be paid in the first half of 2020;

•	the cost and timing of potential milestone payments to Skyepharma, which could be up to an aggregate of $36.0 million if certain milestones pertaining to net sales of DepoBupivacaine products, including EXPAREL, are met, or upon the first commercial sale in the United Kingdom, France, Germany, Italy or Spain;

•	the timing of and extent to which the holders of our 2022 Notes elect to convert their notes;

•	costs related to legal and regulatory issues;

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

•	the costs of performing additional clinical trials for iovera°

•	the costs for the development and commercialization of other product candidates; and

•	the extent to which we acquire or invest in products, businesses and technologies.

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(1)	Awards issuable under our 2011 Plan include common stock, stock options, restricted stock, restricted stock units and other incentive awards.

(2)	Does not include 631,141 unvested shares outstanding as of December 31, 2019 in the form of restricted stock units under our 2011 Plan, which do not require the payment of any consideration by the recipients.

(3)	See Note 14, Stock Plans, to our consolidated financial statements included herein for further descriptions of our equity compensation plans.

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(a)	Documents filed as part of this Annual Report on Form 10-K:

(1)	Financial Statements

(2)	Schedules

(3)	Exhibits

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*	Filed herewith.

**	Furnished herewith.

***	Denotes management contract or compensatory plan or arrangement.

†	Confidential treatment has been requested or granted as to certain portions, which portions were omitted and filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Request.

#	Certain schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K under the Securities Exchange Act of 1934, as amended. The Company hereby undertakes to supplementally furnish copies of any omitted schedules to the Securities and Exchange Commission upon request.

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•	Expected term of the option

•	Expected volatility

•	Expected dividends

•	Risk-free interest rate

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•	Removal of the acquisition-related transaction fees and costs, including certain stock-based compensation and other compensation expenses related to the acquisition, from the year ended December 31, 2019;

•	Removal of the income tax benefit resulting from the Company decreasing its existing valuation allowance on deferred tax assets and the income tax expense resulting from a 338(g) election recognized in the year ended December 31, 2019;

•	Removal of MyoScience’s loss on extinguishment of debt and warrant expense in the year ended December 31, 2019;

•	Removal of MyoScience’s interest expense;

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

•	The addition of amortization expense on the acquired developed technology and customer relationship intangible assets.

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(i)	$10.0 million upon the first commercial sale in the U.S. (met April 2012);

(ii)	$4.0 million upon the first commercial sale in the United Kingdom, France, Germany, Italy or Spain;

(iii)	$8.0 million when annual net sales collected reach $100.0 million (met September 2014);

(iv)	$8.0 million when annual net sales collected reach $250.0 million (met June 2016); and

(v)	$32.0 million when annual net sales collected reach $500.0 million.

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•	Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

•	Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

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•	Level 3: Unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

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