Pacira Pharmaceuticals' (NASDAQ:PCRX) Exparel is helping battle back against the opioid abuse crisis. A local anesthetic, the use of Exparel during surgery can reduce pain, and decrease patients' reliance on opioids during their recovery.

In this clip of The Motley Fool's Industry Focus: Healthcare podcast, analyst Kristine Harjes and Todd Campbell explain why growing use of Exparel is fueling market-beating returns this year, and what could be next for this biotech.

A transcript follows the video.

This podcast was recorded on March 6, 2017.

Kristine Harjes: The next one that we want to talk about is up roughly the same amounts. It's 56% year to date. This is Pacira Pharmaceuticals. Is that how you pronounce this one?

Todd Campbell: I pronounce it differently, but we can go with that. I was just thinking like Pacific. 

Harjes: Oh, OK, I could see that. Don't get it confused with Pacific Biosciences. This one is Pacira Pharmaceuticals. Ticker is PCRX.

Campbell: Yeah. Again, we have got a situation where we have got a company that has a drug on the market that's growing relatively quickly. It's stable. It's not growing as quickly as Exelixis' drug Cabometyx. But 11% year-over-year growth for their drug Exparel, which is an interesting drug because it's used to prevent pain in patients who undergo procedures. What's interesting about this drug is it's not an opiate. You and I have talked about on the show before some of the problems that the country has right now with opiate abuse. As a result, doctors are prescribing opiates as infrequently as they can.

Exparel works by being inserted at the time of the procedure. It's kind of like when you numb your mouth when you're getting a filling. As a result, it not only helps to control pain, but it reduces the reliance by patients on opiates as they're recovering. We have got a company that has just inked a deal with a unit of J&J that's going to help get Exparel in front of more and more doctors. There's a lot of opportunities, theoretically, to expand the use of this across more and more procedure types. So, you get it used in knee procedures and shoulder procedures and soft-tissue procedures. That has some people thinking sales could grow meaningfully from where they are now. They did about $280 million in sales last year.

Harjes: They're definitely forecasting some pretty strong sales growth for this drug. The one thing that I would throw out there as a word of caution with this stock is valuation. They have pretty astronomical numbers. If you look at their price to sales, their P/E, it's all well above industry average.

Campbell: Yeah, it's a $1.8 billion market cap, which isn't ridiculous if you want to say, what would be a takeout valuation, when you're talking about 10 times sales or something like that. But, yeah, it has a little bit of debt it's going to pay down. It's not a cheap stock. Of course, none of these are cheap stocks. They're fast growing, and that's part of the reason that people are willing to pay a little bit more of a premium to own them.

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