Pacira Pharmaceuticals, Inc. (PCRX, Financial) is a specialty pharmaceutical company that sells a long-lasting pain medication called EXPAREL. This is an approved drug for local surgical analgesia (an anesthetic) that can be used for a multitude of soft tissue and orthopedic procedures. Ultimately, we believe that Pacira will obtain a nerve block indication for the drug as well. Effectively, Pacira has taken a generic drug called bupivacaine (under use for decades) and wrapped it with a special time release coating that allows analgesic effects to last for up to three days instead of just hours. This saves money for the health care system by allowing for earlier release of patients and much lower use of dangerous opioid pain killers. This wrapper technology can be used for other drugs, and the company is developing a number of these which could bring additional upside to valuation. We were prior owners of Pacira, but sold the investment at much higher levels when we grew concerned about regulatory issues with the FDA that cropped up at the end of 2014. Shares dropped considerable after that. By the end of the third quarter, we anticipated a favorable resolution of these issues after the FDA removed the warning letter from its website (a highly unusual event), and we re-established our investment at the lower levels caused by the regulatory uncertainty. In the fourth quarter, Pacira resolved all of its marketing issues with the FDA via a formal agreement. This could allow for accelerated growth in 2016. Run rate sales of EXPAREL are now about $250 million and the market could be worth billions. Pacira has the potential for years of continued growth.
From Baron Discover Fund's fourth quarter 2015 commentary.
