What happened

Shares of Pacira BioSciences (PCRX -2.08%) were sinking 12.7% as of 3:33 p.m. EDT on Monday. The decline came after the company announced that eVenus Pharmaceutical Laboratories is seeking Food and Drug Administration approval for a generic version of non-opioid pain drug Exparel.

So what

The possibility of generic competition for Exparel presents a key challenge for Pacira. In the second quarter, the drug generated $130.1 million of the company's total $135.6 million in sales. It's not surprising, therefore, that the pharma stock took a big hit today.

A patient in a hospital bed with a healthcare professional at the bedside.

Image source: Getty Images.

But investors shouldn't put the cart before the horse here. So far, eVenus has only filed an Abbreviated New Drug Application (ANDA) with the FDA. The company is challenging the validity of Pacira's patent. But that patent represents only one of several pending patents that Pacira thinks could extend its marketing position for Exparel into the 2040s.

Now what

Pacira stated in a press release that it's "currently assessing" the notice letter it received related to eVenus' ANDA filing. The company has 45 days to initiate legal action against eVenus for patent infringement. It seems likely that's the course that Pacira will take, considering the company's statement that it "intends to vigorously defend its intellectual property rights relating to Exparel."