Production Problems Lead Pacira to Cut Jobs in San Diego
July 10, 2017
By Alex Keown, BioSpace.com Breaking News Staff
PARSIPPANY, N.J. – Pacira Pharmaceuticals (PCRX) will discontinue manufacturing of its DepoCyt product due to “persistent technical issues.” In addition to shuttering the drug production, Pacira will also terminate employees associated with manufacturing of the drug.
New Jersey-based Pacira made the announcement in a form 8-K filed with the U.S. Securities and Exchange Commission at the end of June. DepoCyt, also known as DepoCyte in Europe, (cytarabine liposome injection) is a sustained-release liposomal formulation of the chemotherapeutic agent cytarabine, according to the company website. DepoCyt, approved by the U.S. Food and Drug Administration in 2007, is indicated for the intrathecal treatment of lymphomatous meningitis, a life-threatening complication of lymphoma.
As a result of its decision to discontinue production of DepoCyt, the company will lay off an undisclosed number of employees. In its filing, Pacira said it expects to record approximately $5 million in related costs, including $2.5 million for asset write-offs and about $500,000 for employee severance. The remaining $2 million is for the remaining lease costs of the San Diego facility where DepoCyt is manufactured.
Shares of Pacira are down about 2 percent this morning, trading at $49.40 per share as of 10:48 a.m. Pacira shares closed at $50.70 on Friday. The stock hit a year-high of $51.70 per share on May 12.
DepoCyt accounted for approximately 2.5 percent of Pacira’s total revenues in 2016, according to the SEC filing. Most of the company’s revenue comes from its non-opioid pain reliever Exparel used in post-surgical treatments. Exparel, a liposome injection of bupivacaine, is a single-dose local anesthetic injected into a surgical site as a post-surgical pain treatment. The drug provides targeted, non-opioid pain control by working right at the site of surgery, allowing for long-lasting pain relief. The drug has been approved for soft-tissue surgeries, orthopedic patients and for oral surgery. It was initially approved in 2011.
The manufacturing problems that caused the company to discontinue DepoCyt are specific to that drug, the company told the publication in-pharmatechnologist. A spokesperson told the publication that the problems in manufacturing have “no relevance to the production of Exparel.”
While the loss of the DepoCyt may cause slight growing pains at Pacira, the company has a strong growth potential this year fueled by its new partnership with Massachusetts-based DePuy Synthes. In January, the two companies forged a co-promotional deal for Exparel. The agreement allows DePuy Synthes to promote Exparel across its joint reconstruction, spine, sports medicine, and trauma businesses to help with postsurgical patient pain.
One thing that makes Exparel an interesting product for post-surgical treatment is the fact it isn’t an opioid. In 2015 there were more than 20,000 deaths associated with opioid pain pill overdoses. The concern over opioid abuse has continued unabated since 2015. Last month, the FDA asked Endo Pharmaceuticals to remove its opioid pain medication, reformulated Opana ER, from the market due to abuse concerns.