A class action lawsuit was filed against Pacira Biosciences, Inc. (PCRX) by Levi & Korsinsky on January 13, 2025. The plaintiffs (shareholders) alleged that they bought PCRX stock at artificially inflated prices between August 2, 2023 and August 8, 2024 (Class Period) and are now seeking compensation for their financial losses. Investors who bought Pacira Biosciences stock during that period can click here to learn about joining the lawsuit.
Pacira Biosciences focuses on developing innovative, non-opioid therapies for effective pain management. Pacira has three commercial stage non-opioid treatments, including EXPAREL, a local anesthetic administered at the time of surgery.
The company’s claims about the exclusivity of EXPAREL and the infringement case against a rival drug related to EXPAREL’s patent are at the heart of the current complaint.
Pacira Biosciences’ Misleading Claims
According to the lawsuit, Pacira and three of its current and/or former senior officers (Individual Defendants) repeatedly made false and misleading public statements throughout the Class Period. Particularly, they are accused of omitting truthful information about the patent protections on EXPAREL from SEC filings and related material.
For instance, during the Class Period, Pacira noted in a quarterly report that its performance was primarily based on the commercial success of drugs, EXPAREL and ZILRETTA.
Furthermore, the company discussed about the various patents it was granted by the United States Patent and Trademark Office (USPTO) in connection to EXPAREL. The drug was granted patent protection through 2041, based on a series of U.S. Patents issued from 2021 to 2023.
Lastly, during an earnings call dated July 30, 2024, Pacira’s Chief Legal and Compliance Officer noted that the court had concluded that Patent 495 was not valid against rival eVenus. This was an unfavorable scenario because it meant eVenus was not infringing on EXPAREL’s patents. Consequently, the company was prepared with a suite of strategies to continue the fight based on the court’s findings.
Notably, subsequent events (discussed below) revealed that the defendants wilfully misled investors about the possibility of winning the patent infringement case against eVenus. The company also misled investors about EXPAREL’s exclusivity, making it less commercially viable.
Plaintiffs’ Arguments
The plaintiffs maintain that the Defendants deceived investors by lying and withholding critical information about the business and prospects during the Class Period. Importantly, the Defendants are accused of misleading investors about the potential favorable outcomes of the ongoing patent infringement case against eVenus.
The information became clear on August 9, 2024, when Pacira announced the ruling in its patent infringement case against eVenus. Unfortunately, the U.S. District Court for the District of New Jersey had concluded that Pacira’s U.S. Patent No. 11,033,495 was not valid.
The company’s CEO replied in this context that Pacira was confident that eVenus was infringing on its Patent 495. Accordingly, Pacira was considering other legal options, including “pursuing an appellate review at the U.S. Court of Appeals for the Federal Court as warranted.” Following the news, PCRX stock collapsed by more than 47% on August 9.
To conclude, the defendants allegedly misled investors about the possibility of winning the patent infringement case against eVenus and its commercial viability. In the past year, PCRX stock has lost 17.6%.
