No Pain, Big Gains for This Pharma Stock?

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

No pain, no gain? That's not the mantra for small-cap Pacira Pharmaceuticals (Nasdaq: PCRX  ) . Pacira hopes that no pain means big gains. The company announced this week the initiation of phase 2/3 clinical trials for its nerve block injection, Exparel, for use in total knee arthroplasty surgery.

Knee surgery isn't the first target for Exparel. Neither will it be the last.

Pacira obtained FDA approval for the drug in October 2011 for post-surgical pain management. This approval followed a successful trial of Exparel in reducing pain after hemorrhoidectomy surgery. The company launched commercial sale of the product in April of this year. Clinical trials of Exparel are also planned for use in thoracotomy (lung surgery).

A single-dose injection of the drug close to a nerve provides pain reduction that lasts for several days. This alternative should appeal to physicians and patients who would rather not risk the potential for infection and leakage associated with external catheters and other devices.

Pacira could have to tackle some competitors to score big with Exparel, though. It would need to displace the aforementioned external catheters used to deliver drugs such as Sensorcaine, made by AstraZeneca (NYSE: AZN  ) .

Commonly prescribed drug for reducing pain after surgeries include Percocet, made by Endo Pharmaceuticals (Nasdaq: ENDP  ) , and Johnson & Johnson (NYSE: JNJ  ) sells Nucynta, another popular pain medication. Exparel doesn't have the degree of adverse side effects that these opioid drugs have -- a key advantage.

Pacira should not have to slam these competitors to the ground, either. Physicians could elect to use Exparel along with opioids, but with lesser quantities of the other drugs.

The company has experienced a few fumbles in recent months despite some success with Exparel. In June, Novo Nordisk AS (NYSE: NVO  ) terminated a multi-million dollar agreement with Pacira to use its DepoFoam drug delivery technology in the development of a new drug.

In August, the European Medicines Agency recommended a recall of Pacira's cancer drug DepoCyte. The agency cited problems with a manufacturing plant operated by the company in San Diego.

Some investors appear to be emphasizing Pacira's stumbles over its successes. Short interest currently stands at nearly 25% of the company's float. This level reflects an increase of around 25% in the past month.

Although the company appears to have solid potential for Exparel, investors probably should punt for now. There is still a considerable level of risk in investing in Pacira. Watch sales numbers for Exparel, though. If they take off in a dramatic way, the short-sellers will run to cover their short positions. If this occurs, we will have an entirely different ball game.

One industry seems destined to enter a brand new ball game. Find out which one -- and how you can profit from the big changes coming -- in The Motley Fool's special report "The Next Trillion-Dollar Revolution". Get your free copy now by clicking here!

Fool contributor Keith Speights owns no shares in the stocks mentioned above. The Motley Fool owns shares of Johnson & Johnson. Motley Fool newsletter services have recommended buying shares of and creating a diagonal call position in Johnson & Johnson. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Read/Post Comments (2) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 27, 2012, at 1:47 PM, Jckund wrote:

    Don't see where you're getting this 25% short interest... I see 10%.

  • Report this Comment On September 27, 2012, at 9:33 PM, TMFFishBiz wrote:

    Yahoo Finance actually shows short percent of float for PCRX at 27% now. The short ratio is around 12, though. I'm not sure where you're seeing 10%. Maybe it's the timing of the data? Thanks.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2034140, ~/Articles/ArticleHandler.aspx, 10/26/2016 9:42:24 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,169.27 -53.76 0.00%
S&P 500 2,133.77 -9.39 -0.44%
NASD 5,283.40 -26.43 0.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/25/2016 4:00 PM
PCRX $36.55 Up +1.85 +0.00%
Pacira Pharmaceuti… CAPS Rating: ***
AZN $29.79 Down -0.29 +0.00%
AstraZeneca CAPS Rating: ****
ENDP $21.48 Up +0.67 +0.00%
Endo International CAPS Rating: ****
JNJ $113.96 Up +0.35 +0.00%
Johnson and Johnso… CAPS Rating: ****
NVO $40.33 Down -0.48 +0.00%
Novo Nordisk CAPS Rating: *****