Image source: Pacira Pharmaceuticals.

What: Shares of Pacira Pharmaceuticals (NASDAQ:PCRX) are rallying 19.7% at 1:00 p.m. EDT after the company reported second-quarter financials that outpaced industry watchers' estimates.

So what: Pacira Pharmaceuticals generates 96% of its revenue from Exparel, a surgical pain medication, and in the second quarter, rising demand for Exparel resulted in sales of  $69.6 million, up 17.7% year over year, and earnings per share (EPS) of $0.19, which was $0.16 ahead of analyst expectations. 

"The second quarter marked another period of double-digit, year-over-year revenue growth as we advanced multiple initiatives to support Exparel in the latter half of this year and into 2017," said Pacira CEO and Chairman Dave Stack. "Our aggressive investments in patient outreach and clinical development, as well as commercial and educational programs, are progressing as planned. For the rest of this year, we look forward to continuing the strong progress we've made with the Phase 4 randomized controlled trials in strategic orthopedic surgeries, Phase 3 nerve block studies, enhanced recovery protocols in soft tissue procedures and data presentations on bundled payments. We also anticipate increasing our public relations and advocacy efforts to bring attention to addressing the opioid epidemic by providing an alternative to opioids in the acute postsurgical setting, where epidemic often starts."

The strong results suggest that doctors are increasingly turning to Exparel, rather than opioids, to relieve patient pain following procedures, and given that the market for opioid pain relief is worth billions of dollars annually, the company's runway for growth could be long. 

Worldwide, pain drugs are the second-biggest class of drugs -- about 300 million prescriptions written last year were worth an estimated $24 billion. 

Now what: Pacira is positioning Exparel as a better-than-opioid option and studies that confirm its ability to provide pain relief in multiple settings could lead to label expansions that significantly expand the drug's addressable market. For example, the company plans to launch Exparel for use in oral surgery, such as wisdom teeth procedures, in the coming months. 

Overall, Pacira's double-digit growth and profitability make it an intriguing stock for biotech investors to own, especially given that doctors are increasingly looking for non-opioid pain solutions in the wake of rising opioid abuse. Pacira's management is guiding for sales of at least $270 million, up from $249 million in 2015, and the various revenue tailwinds could lead to even greater sales next year.

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