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GQ BIO THERAPEUTICS ACQUISITION | 6 Months Ended
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Jun. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract] |
GQ BIO THERAPEUTICS ACQUISITION | GQ BIO THERAPEUTICS ACQUISITION On February 27, 2025, Pacira Therapeutics, Inc., a wholly-owned subsidiary of the Company, executed a securities purchase agreement to acquire the remaining 81% of GQ Bio for $30.6 million, net of working capital adjustments. Prior to the GQ Bio Acquisition, the Company owned approximately 19% of GQ Bio. Included in the securities purchase agreement are payments of $7.8 million related to two employees’ payments to be recognized over three years pursuant to a key employee holdback agreement in increments of 50%, 30% and 20% at each year’s respective anniversary. During the three and six months ended June 30, 2025, the Company accrued key employee holdback expenses of $1.1 million and $1.5 million, respectively. The key employee holdback is subject to continued employment, and therefore the accrued payments are recognized as research and development expense within the condensed consolidated statements of operations. GQ Bio was a privately-held biopharmaceutical company with a novel, high-capacity, local-delivery platform that makes genetic medicines more efficient and enables the use of large and multiple gene constructs. PCRX-201 is the lead program from this platform. By acquiring GQ Bio, the Company benefits from further developing PCRX-201 and the cost savings associated with no longer being obligated to make milestone and royalty payments, as well as establishing a research and development engine with a dedicated workforce focused on this next-generation of genetic medicine and acquiring a portfolio of preclinical assets. The following table reconciles the purchase price for the remaining 81% ownership to the total fair value of the GQ Bio Acquisition (in thousands):
Fair Value of Purchase Price Consideration |  | Amount
Cash consideration paid at closing |  | $ | 17,604 |
Indemnification holdback |  | 5,676 |
Cash payment of GQ Bio Acquisition transaction expenses |  | 919 |
Settlement of previously invested note receivable |  | 5,322 |
Settlement of pre-existing receivable |  | 1,055 |
Purchase price consideration of 81% of GQ Bio |  | 30,576 |
Prior 19% equity investment ownership of GQ Bio realized upon business combination |  | 8,315 |
Total fair value of the GQ Bio Acquisition |  | $ | 38,891 |
The Company has accounted for the GQ Bio Acquisition using the acquisition method of accounting and, accordingly, has included the assets acquired, liabilities assumed and results of operations in its condensed consolidated financial statements from the acquisition date of February 27, 2025. A $5.7 million indemnification holdback established for potential unidentified liabilities will be settled within 18 months from the acquisition date. In conjunction with the GQ Bio Acquisition, the settlement of the Company’s prior equity investment and notes receivable in GQ Bio were part of the fair value of consideration exchanged. See Note 10, Financial Instruments, for additional information. The preliminary purchase price allocation is based on estimates, assumptions, valuations and other studies which have not yet been finalized. Prior to the finalization of the purchase price allocation, if information becomes available that would indicate it is probable that unknown events had occurred and the amounts can be reasonably estimated, such items will be included in the final purchase price allocation and may change the carrying value of goodwill. The Company is finalizing its valuation of intangible assets, tangible assets, liabilities and tax analyses, and anticipates finalizing the purchase price allocation as the information necessary to complete the analysis is obtained, but no later than one year after the acquisition date. The following tables set forth the preliminary allocation of the GQ Bio Acquisition purchase price to the estimated fair value of the net assets acquired at the acquisition date (in thousands):
|  | Amounts Recognized at the Acquisition Date (as Previously Reported) (a) |  | Measurement Period Adjustments (b) |  | Amounts Recognized at the Acquisition Date (as Adjusted)
ASSETS ACQUIRED |  |  |  |  |  |
Cash and cash equivalents |  | $ | 1,884 |  |  | $ | — |  |  | $ | 1,884 |
Accounts receivable |  | 900 |  |  | — |  |  | 900 |
Prepaid expenses and other assets |  | 120 |  |  | 383 |  |  | 503 |
Fixed assets |  | 364 |  |  | — |  |  | 364 |
Right-of-use assets |  | 1,374 |  |  | — |  |  | 1,374 |
In-process research and development (IPR&D) |  | 22,500 |  |  | — |  |  | 22,500 |
Other noncurrent assets |  | 56 |  |  | — |  |  | 56 |
Total assets |  | $ | 27,198 |  |  | $ | 383 |  |  | $ | 27,581 |
LIABILITIES ASSUMED |  |  |  |  |  |
Accounts payable |  | $ | 1,037 |  |  | $ | (39) |  |  | $ | 998 |
Accrued expenses |  | 91 |  |  | 191 |  |  | 282 |
Lease liabilities |  | 1,374 |  |  | — |  |  | 1,374 |
Deferred tax liability |  | 6,750 |  |  | (2,664) |  |  | 4,086 |
Other liabilities |  | 49 |  |  | — |  |  | 49 |
Total liabilities |  | 9,301 |  |  | (2,512) |  |  | 6,789 |
Total identifiable net assets acquired |  | 17,897 |  |  | 2,895 |  |  | 20,792 |
Goodwill |  | 20,763 |  |  | (2,664) |  |  | 18,099 |
Total fair value of the GQ Bio Acquisition |  | $ | 38,660 |  |  | $ | 231 |  |  | $ | 38,891 |
(a) As previously reported in the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2025. (b) Represents an adjustment to a deferred tax liability, unrecorded liabilities related to pre-acquisition expenses that were paid by the Company in 2025. The acquired identifiable IPR&D assets were valued from a market participants’ perspective using a multi-period excess earnings methodology (income approach). The IPR&D asset relates to further developing PCRX-201 and the cost savings associated with milestone and royalty payments. The projected cash flows for this IPR&D asset were adjusted for the probability of successful development and commercialization, and were discounted at 20.0%. The excess of the purchase price over the fair value of identifiable net assets acquired represents goodwill. This goodwill is primarily attributable to the value in establishing a research and development engine focused on supporting products akin to PCRX-201, assembling a dedicated workforce within a niche industry, obtained preclinical assets, as well as the synergies of merging operations. The acquired goodwill and IPR&D intangible asset are currently not deductible for tax purposes. However, the Company is considering certain tax elections that would allow for the future deduction of the acquired goodwill and IPR&D intangible asset. During the six months ended June 30, 2025, GQ Bio did not earn any revenue.

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