What happened

After reporting fourth-quarter and full-year financial results that came in better than industry-watchers' forecasts, shares in Pacira Pharmaceuticals (NASDAQ:PCRX) are rallying 13.6% as of 3:50 p.m. EST today.

So what

Sales of Pacira Pharmaceuticals' surgical-pain medicine Exparel fueled strong sales growth in both the fourth quarter and the full year, and momentum could build in 2017 following a successful phase 4 study and a new distribution deal.

Businesspeople on a street scurry about to catch money as it falls from the sky.

IMAGE SOURCE: GETTY IMAGES.

In the fourth quarter, Pacira Pharmaceuticals sales totaled $72.9 million, up 5.9% when compared to a year ago. The company also reported non-GAAP (generally accepted accounting principles) earnings per share of $0.09 in the quarter. For the full year, sales increased 11% to $276.4 million and non-GAAP EPS was $0.62.

The company also updated investors on its progress in driving additional sales of Exparel, a pain treatment that's its only commercial-stage medicine. In phase 4 trials, Exparel met its primary endpoint for reducing pain and reliance on opioid medications following total knee arthroplasty. In January, DePuy Synthes signed on to help market Exparel to doctors specializing in joint reconstruction, spinal treatment, sports medicine, or trauma.

Now what

Management expects Exparel sales of between $290 million and $310 million this year, up 9% from 2016 at the low end. If the company can leverage its latest efficacy data and its relationship with DePuy, then it may be able to exceed those projections. The company expects data from nerve-block studies this year that could eventually boost demand for Exparel, too.

Although there are some solid growth opportunities that could allow earnings to accelerate, Pacira Pharmaceuticals isn't a cheap stock. Based on forward earnings estimates, shares are trading at a price-to-earnings ratio of about 54. That's a bit rich, especially since shares are also trading at a price-to-sales ratio of about 6. Because of this stock's valuation, I'm concentrating on other investment ideas right now.

Todd Campbell has no position in any stocks mentioned. His clients may have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.