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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One) |
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2026
OR

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to
Commission File Number: 001-35060

PACIRA BIOSCIENCES, INC.
(Exact Name of Registrant as Specified in its Charter)

Delaware |  | 51-0619477
(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification No.)

2000 Sierra Point Parkway, Suite 900
Brisbane, California 94005
(Address and Zip Code of Principal Executive Offices)
(650) 242-8052
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:

Title of each class |  | Trading symbol |  | Name of each exchange on which registered
Common Stock, par value $0.001 per share |  | PCRX |  | Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.) ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

| Large accelerated filer | ☒ |  | Accelerated filer | ☐ |
| Non-accelerated filer | ☐ |  | Smaller reporting company | ☐ |
|  |  |  | Emerging growth company | ☐ |

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
As of August 3, 2026, 39,861,886 shares of the registrant’s common stock, $0.001 par value per share, were outstanding.
ii

Table of Contents
PACIRA BIOSCIENCES, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2026
TABLE OF CONTENTS

|  | Page #
PART I. FINANCIAL INFORMATION | 2
Item 1. | Financial Statements (Unaudited) | 2
| Condensed Consolidated Balance Sheets | 2
| Condensed Consolidated Statements of Operations | 3
| Condensed Consolidated Statements of Comprehensive Income (Loss) | 4
| Condensed Consolidated Statements of Stockholders’ Equity | 5
| Condensed Consolidated Statements of Cash Flows | 7
| Notes to Condensed Consolidated Financial Statements | 9
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 34
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 50
Item 4. | Controls and Procedures | 51
PART II. OTHER INFORMATION | 52
Item 1. | Legal Proceedings | 53
Item 1A. | Risk Factors | 53
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 53
Item 3. | Defaults Upon Senior Securities | 53
Item 4. | Mine Safety Disclosures | 53
Item 5. | Other Information | 54
Item 6. | Exhibits | 54
Signatures |  | 55

Pacira BioSciences, Inc. | Q2 2026 Quarterly Report on Form 10-Q | 1

Table of Contents
PART I — FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS (Unaudited)
PACIRA BIOSCIENCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)

| June 30, 2026 |  | December 31, 2025
ASSETS |  |  |
Current assets: |  |  |
Cash and cash equivalents | $ | 205,875 |  |  | $ | 158,545 |
Short-term available-for-sale investments | 45,156 |  |  | 79,879 |
Accounts receivable, net | 132,420 |  |  | 124,069 |
Inventories, net | 134,575 |  |  | 152,863 |
Assets held for sale | 67,337 |  |  | — |
Prepaid expenses and other current assets | 29,852 |  |  | 32,618 |
Total current assets | 615,215 |  |  | 547,974 |
Fixed assets, net | 130,277 |  |  | 140,690 |
Right-of-use assets, net | 44,920 |  |  | 41,777 |
Goodwill | 19,642 |  |  | 20,214 |
Intangible assets, net | 285,484 |  |  | 368,100 |
Deferred tax assets | 124,598 |  |  | 123,854 |
Investments and other assets | 23,842 |  |  | 22,308 |
Total assets | $ | 1,243,978 |  |  | $ | 1,264,917 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |
Current liabilities: |  |  |
Accounts payable | $ | 17,509 |  |  | $ | 15,150 |
Accrued expenses | 93,499 |  |  | 95,601 |
Lease liabilities | 10,298 |  |  | 9,839 |
Liabilities held for sale | 705 |  |  | — |
Total current liabilities | 122,011 |  |  | 120,590 |
Long-term debt, net | 363,124 |  |  | 372,189 |
Lease liabilities | 38,695 |  |  | 36,176 |
Contingent consideration | 17,452 |  |  | 18,066 |
Deferred tax liabilities | 4,070 |  |  | 4,213 |
Other liabilities | 26,650 |  |  | 20,572 |
Total liabilities | 572,002 |  |  | 571,806 |
Commitments and contingencies (Note 17) |  |  |
Stockholders’ equity: |  |  |
Preferred stock, par value $0.001; 5,000,000 shares authorized; none issued and outstanding at June 30, 2026 and December 31, 2025 | — |  |  | — |
Common stock, par value $0.001; 250,000,000 shares authorized; 48,840,889 shares issued and 39,822,298 shares outstanding at June 30, 2026 and 47,890,777 shares issued and 41,116,739 shares outstanding at December 31, 2025 | 49 |  |  | 48 |
Treasury stock, at cost, inclusive of excise tax and broker fees, 9,018,591 and 6,774,038 shares at June 30, 2026 and December 31, 2025, respectively | (227,013) |  |  | (176,565) |
Additional paid-in capital | 1,087,452 |  |  | 1,064,623 |
Accumulated deficit | (191,753) |  |  | (199,322) |
Accumulated other comprehensive income | 3,241 |  |  | 4,327 |
Total stockholders’ equity | 671,976 |  |  | 693,111 |
Total liabilities and stockholders’ equity | $ | 1,243,978 |  |  | $ | 1,264,917 |

See accompanying notes to condensed consolidated financial statements.
Pacira BioSciences, Inc. | Q2 2026 Quarterly Report on Form 10-Q | 2

Table of Contents
PACIRA BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)

| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2026 |  | 2025 |  | 2026 |  | 2025
Revenues: |  |  |  |  |  |  |
Net product sales | $ | 190,493 |  |  | $ | 180,347 |  |  | $ | 367,869 |  |  | $ | 347,941 |
Royalty revenue | 1,906 |  |  | 752 |  |  | 1,906 |  |  | 2,081 |
Total revenues | 192,399 |  |  | 181,099 |  |  | 369,775 |  |  | 350,022 |
Operating expenses: |  |  |  |  |  |  |
Cost of goods sold (exclusive of amortization of acquired intangible assets) | 44,164 |  |  | 40,866 |  |  | 80,577 |  |  | 75,172 |
Research and development | 30,243 |  |  | 28,200 |  |  | 58,315 |  |  | 53,893 |
Selling, general and administrative | 91,809 |  |  | 88,578 |  |  | 185,753 |  |  | 175,354 |
Amortization of acquired intangible assets | 14,322 |  |  | 14,322 |  |  | 28,644 |  |  | 28,644 |
Other operating expenses, net | 7,594 |  |  | 634 |  |  | 5,317 |  |  | 6,470 |
Total operating expenses | 188,132 |  |  | 172,600 |  |  | 358,606 |  |  | 339,533 |
Income from operations | 4,267 |  |  | 8,499 |  |  | 11,169 |  |  | 10,489 |
Other income (expense): |  |  |  |  |  |  |
Interest income | 1,944 |  |  | 5,008 |  |  | 3,874 |  |  | 11,903 |
Interest expense | (3,622) |  |  | (4,695) |  |  | (7,321) |  |  | (9,275) |
Other, net | (34) |  |  | (10,739) |  |  | (169) |  |  | (6,338) |
Total other expense, net | (1,712) |  |  | (10,426) |  |  | (3,616) |  |  | (3,710) |
Income (loss) before income taxes | 2,555 |  |  | (1,927) |  |  | 7,553 |  |  | 6,779 |
Income tax benefit (expense) | 2,098 |  |  | (2,920) |  |  | 16 |  |  | (6,814) |
Net income (loss) | $ | 4,653 |  |  | $ | (4,847) |  |  | $ | 7,569 |  |  | $ | (35) |
Net income (loss) per common share: |  |  |  |  |  |  |
Basic and diluted net income (loss) per common share | $ | 0.12 |  |  | $ | (0.11) |  |  | $ | 0.19 |  |  | $ | (0.00) |
Weighted average common shares outstanding: |  |  |  |  |  |  |
Basic | 39,462 |  |  | 45,459 |  |  | 39,961 |  |  | 45,867 |
Diluted | 40,300 |  |  | 45,459 |  |  | 40,605 |  |  | 45,867 |

See accompanying notes to condensed consolidated financial statements.
Pacira BioSciences, Inc. | Q2 2026 Quarterly Report on Form 10-Q | 3

Table of Contents
PACIRA BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
(Unaudited)

| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2026 |  | 2025 |  | 2026 |  | 2025
Net income (loss) | $ | 4,653 |  |  | $ | (4,847) |  |  | $ | 7,569 |  |  | $ | (35) |
Other comprehensive income (loss): |  |  |  |  |  |  |
Net unrealized gain (loss) on investments, net of tax | 15 |  |  | (45) |  |  | (42) |  |  | (131) |
Foreign currency translation adjustments | (229) |  |  | 2,756 |  |  | (1,044) |  |  | 3,850 |
Total other comprehensive (loss) income | (214) |  |  | 2,711 |  |  | (1,086) |  |  | 3,719 |
Comprehensive income (loss) | $ | 4,439 |  |  | $ | (2,136) |  |  | $ | 6,483 |  |  | $ | 3,684 |

See accompanying notes to condensed consolidated financial statements.
Pacira BioSciences, Inc. | Q2 2026 Quarterly Report on Form 10-Q | 4

Table of Contents
PACIRA BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 2026 AND 2025
(In thousands)
(Unaudited)

| Number of Shares Outstanding |  |  |  |  |  | Additional Paid-In Capital |  | Accumulated Deficit |  | Accumulated Other Comprehensive Income |  |
| Common Shares |  | Treasury Shares |  | Common Stock |  | Treasury Stock |  |  |  |  | Total
Balance at March 31, 2026 | 48,328 |  |  | (9,019) |  |  | $ | 48 |  |  | $ | (227,013) |  |  | $ | 1,073,809 |  |  | $ | (196,406) |  |  | $ | 3,455 |  |  | $ | 653,893 |
Exercise of stock options | 28 |  |  | — |  |  | — |  |  | — |  |  | 457 |  |  | — |  |  | — |  |  | 457 |
Vested restricted stock units | 559 |  |  | — |  |  | 1 |  |  | — |  |  | (1) |  |  | — |  |  | — |  |  | — |
Common stock withheld for employee withholding tax liabilities on vested restricted stock units | (157) |  |  | — |  |  | — |  |  | — |  |  | (3,493) |  |  | — |  |  | — |  |  | (3,493) |
Common stock issued under employee stock purchase plan | 83 |  |  | — |  |  | — |  |  | — |  |  | 1,722 |  |  | — |  |  | — |  |  | 1,722 |
Stock-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | 14,958 |  |  | — |  |  | — |  |  | 14,958 |
Other comprehensive loss (Note 10) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (214) |  |  | (214) |
Net income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 4,653 |  |  | — |  |  | 4,653 |
Balance at June 30, 2026 | 48,841 |  |  | (9,019) |  |  | $ | 49 |  |  | $ | (227,013) |  |  | $ | 1,087,452 |  |  | $ | (191,753) |  |  | $ | 3,241 |  |  | $ | 671,976 |

| Number of Shares Outstanding |  |  |  |  |  | Additional Paid-In Capital |  | Accumulated Deficit |  | Accumulated Other Comprehensive Income |  |
| Common Shares |  | Treasury Shares |  | Common Stock |  | Treasury Stock |  |  |  |  | Total
Balance at March 31, 2025 | 47,121 |  |  | (837) |  |  | $ | 47 |  |  | $ | (25,121) |  |  | $ | 1,023,808 |  |  | $ | (201,544) |  |  | $ | 1,351 |  |  | $ | 798,541 |
Vested restricted stock units | 669 |  |  | — |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1 |
Common stock withheld for employee withholding tax liabilities on vested restricted stock units | (200) |  |  | — |  |  | — |  |  | — |  |  | (5,286) |  |  | — |  |  | — |  |  | (5,286) |
Common stock issued under employee stock purchase plan | 101 |  |  | — |  |  | — |  |  | — |  |  | 1,569 |  |  | — |  |  | — |  |  | 1,569 |
Stock-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | 15,472 |  |  | — |  |  | — |  |  | 15,472 |
Purchase of treasury stock, inclusive of excise tax and broker fees | — |  |  | (1,956) |  |  | — |  |  | (50,394) |  |  | — |  |  | — |  |  | — |  |  | (50,394) |
Other comprehensive income (Note 10) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,711 |  |  | 2,711 |
Net loss | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (4,847) |  |  | — |  |  | (4,847) |
Balance at June 30, 2025 | 47,691 |  |  | (2,793) |  |  | $ | 48 |  |  | $ | (75,515) |  |  | $ | 1,035,563 |  |  | $ | (206,391) |  |  | $ | 4,062 |  |  | $ | 757,767 |

See accompanying notes to condensed consolidated financial statements.
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PACIRA BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
(In thousands)
(Unaudited)

| Number of Shares Outstanding |  |  |  |  |  | Additional Paid-In Capital |  | Accumulated Deficit |  | Accumulated Other Comprehensive Income |  |
| Common Shares |  | Treasury Shares |  | Common Stock |  | Treasury Stock |  |  |  |  | Total
Balance at December 31, 2025 | 47,891 |  |  | (6,774) |  |  | $ | 48 |  |  | $ | (176,565) |  |  | $ | 1,064,623 |  |  | $ | (199,322) |  |  | $ | 4,327 |  |  | $ | 693,111 |
Exercise of stock options | 28 |  |  | — |  |  | — |  |  | — |  |  | 459 |  |  | — |  |  | — |  |  | 459 |
Vested restricted stock units | 1,206 |  |  | — |  |  | 1 |  |  | — |  |  | (1) |  |  | — |  |  | — |  |  | — |
Common stock withheld for employee withholding tax liabilities on vested restricted stock units | (367) |  |  | — |  |  | — |  |  | — |  |  | (7,848) |  |  | — |  |  | — |  |  | (7,848) |
Common stock issued under employee stock purchase plan | 83 |  |  | — |  |  | — |  |  | — |  |  | 1,722 |  |  | — |  |  | — |  |  | 1,722 |
Stock-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | 28,497 |  |  | — |  |  | — |  |  | 28,497 |
Purchase of treasury stock, inclusive of excise tax and broker fees | — |  |  | (2,245) |  |  | — |  |  | (50,448) |  |  | — |  |  | — |  |  | — |  |  | (50,448) |
Other comprehensive loss (Note 11) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,086) |  |  | (1,086) |
Net income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 7,569 |  |  | — |  |  | 7,569 |
Balance at June 30, 2026 | 48,841 |  |  | (9,019) |  |  | $ | 49 |  |  | $ | (227,013) |  |  | $ | 1,087,452 |  |  | $ | (191,753) |  |  | $ | 3,241 |  |  | $ | 671,976 |

| Number of Shares Outstanding |  |  |  |  |  | Additional Paid-In Capital |  | Accumulated Deficit |  | Accumulated Other Comprehensive Income |  |
| Common Shares |  | Treasury Shares |  | Common Stock |  | Treasury Stock |  |  |  |  | Total
Balance at December 31, 2024 | 47,078 |  |  | (837) |  |  | $ | 47 |  |  | $ | (25,121) |  |  | $ | 1,009,435 |  |  | $ | (206,356) |  |  | $ | 343 |  |  | $ | 778,348 |
Vested restricted stock units | 722 |  |  | — |  |  | 1 |  |  | — |  |  | 1 |  |  | — |  |  | — |  |  | 2 |
Common stock withheld for employee withholding tax liabilities on vested restricted stock units | (210) |  |  | — |  |  | — |  |  | — |  |  | (5,467) |  |  | — |  |  | — |  |  | (5,467) |
Common stock issued under employee stock purchase plan | 101 |  |  | — |  |  | — |  |  | — |  |  | 1,569 |  |  | — |  |  | — |  |  | 1,569 |
Stock-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | 30,025 |  |  | — |  |  | — |  |  | 30,025 |
Purchase of treasury stock, inclusive of excise tax and broker fees | — |  |  | (1,956) |  |  | — |  |  | (50,394) |  |  | — |  |  | — |  |  | — |  |  | (50,394) |
Other comprehensive income (Note 11) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,719 |  |  | 3,719 |
Net loss | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (35) |  |  | — |  |  | (35) |
Balance at June 30, 2025 | 47,691 |  |  | (2,793) |  |  | $ | 48 |  |  | $ | (75,515) |  |  | $ | 1,035,563 |  |  | $ | (206,391) |  |  | $ | 4,062 |  |  | $ | 757,767 |

See accompanying notes to condensed consolidated financial statements.
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PACIRA BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

| Six Months Ended June 30,
| 2026 |  | 2025
Operating activities: |  |  |
Net income (loss) | $ | 7,569 |  |  | $ | (35) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |  |
Release of valuation allowance on deferred tax assets | (6,397) |  |  | — |
Investment impairment | — |  |  | 11,000 |
Deferred taxes | 5,644 |  |  | 2,149 |
Depreciation of fixed assets and amortization of intangible assets | 42,626 |  |  | 48,490 |
Amortization of debt issuance costs and debt discount | 1,154 |  |  | 1,739 |
Amortization of cloud computing arrangements | 663 |  |  | 186 |
Stock-based compensation | 28,497 |  |  | 30,025 |
Changes in contingent consideration | (614) |  |  | (3,032) |
Net accretion of discount on available-for-sale investments | (927) |  |  | (3,444) |
Other net gains | — |  |  | (5,887) |
Changes in operating assets and liabilities: |  |  |
Accounts receivable, net | (12,074) |  |  | (1,046) |
Inventories, net | 8,451 |  |  | (22,871) |
Prepaid expenses and other assets | 378 |  |  | (15,377) |
Accounts payable | 2,248 |  |  | 9,344 |
Accrued expenses | 1,563 |  |  | (14,675) |
Other liabilities | 4,359 |  |  | 10,905 |
Net cash provided by operating activities | 83,140 |  |  | 47,471 |
Investing activities: |  |  |
Acquisition of GQ Bio Therapeutics GmbH (net of cash acquired) | (335) |  |  | (16,702) |
Purchases of fixed assets | (4,060) |  |  | (11,245) |
Purchases of available-for-sale investments | (3,905) |  |  | (74,685) |
Sales of available-for-sale investments | 39,500 |  |  | 140,416 |
Purchase of convertible notes receivable investment | — |  |  | (1,250) |
Net cash provided by investing activities | 31,200 |  |  | 36,534 |
Financing activities: |  |  |
Proceeds from exercises of stock options | 459 |  |  | — |
Proceeds from shares issued under employee stock purchase plan | 1,722 |  |  | 1,569 |
Payment of employee withholding taxes on restricted stock unit vests | (7,848) |  |  | (5,466) |
Purchase of treasury stock, inclusive of broker fees | (50,045) |  |  | (50,039) |
Excise taxes paid on treasury stock repurchases | (1,336) |  |  | — |
Repayment of Term loan A facility | — |  |  | (6,563) |
Repayment of Revolving Credit Facility | (10,000) |  |  | — |
Net cash used in financing activities | (67,048) |  |  | (60,499) |
Effect of exchange rate changes on cash and cash equivalents | 38 |  |  | 204 |
Net increase in cash and cash equivalents | 47,330 |  |  | 23,710 |
Cash and cash equivalents, beginning of period | 158,545 |  |  | 276,774 |
Cash and cash equivalents, end of period | $ | 205,875 |  |  | $ | 300,484 |
See accompanying notes to condensed consolidated financial statements.

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PACIRA BIOSCIENCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (In thousands) (Unaudited)
| Six Months Ended June 30,
| 2026 |  | 2025
Supplemental cash flow information: |  |  |
Cash paid for interest | $ | 6,171 |  |  | $ | 7,687 |
Net cash paid for income taxes | $ | 910 |  |  | $ | 8,233 |
Non-cash investing and financing activities: |  |  |
Fixed assets included in accounts payable and accrued liabilities | $ | 1,506 |  |  | $ | 1,431 |
Excise tax on treasury stock repurchases included in accrued liabilities | $ | 403 |  |  | $ | 354 |

See accompanying notes to condensed consolidated financial statements.
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PACIRA BIOSCIENCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1—DESCRIPTION OF BUSINESS
Pacira BioSciences, Inc. and its subsidiaries (collectively, the “Company” or “Pacira”) deliver innovative, non-opioid pain therapies to transform the lives of patients. The Company’s long-acting, local analgesic, EXPAREL® (bupivacaine liposome injectable suspension), was commercially launched in the United States, or U.S., in April 2012 and approved in select European countries and the United Kingdom, or U.K., in November 2021. EXPAREL utilizes the Company’s proprietary multivesicular liposome, or pMVL, drug delivery technology that encapsulates drugs without altering their molecular structure and releases them over a desired period of time. EXPAREL is currently indicated to produce postsurgical local analgesia via infiltration in patients aged six years and older, and postsurgical regional analgesia in adults via (i) an interscalene brachial plexus block in adults; (ii) a sciatic nerve block in the popliteal fossa; or (iii) an adductor canal block in adults for postsurgical pain management (the safety and effectiveness of EXPAREL have not been established to produce postsurgical regional analgesia via other nerve blocks other than an interscalene brachial plexus nerve block, a sciatic nerve block in the popliteal fossa, and an adductor canal block). In November 2021, the Company acquired Flexion Therapeutics, Inc., or Flexion (the “Flexion Acquisition”), and added ZILRETTA® (triamcinolone acetonide extended-release injectable suspension) to its product portfolio. ZILRETTA is the first and only extended-release, intra-articular (meaning in the joint) injection indicated for the management of osteoarthritis, or OA, knee pain. The Company is also advancing two Phase 2 clinical programs—PCRX-201 (enekinragene inzadenovec), a novel, locally administered gene therapy for OA of the knee, and PCRX-2002, a complementary, long-acting formulation of the non-opioid analgesic ropivacaine for postsurgical pain control. PCRX-201 is the lead program from the Company’s proprietary high-capacity adenovirus, or HCAd, vector platform, which enables local administration of genetic medicines and has the potential to unlock gene therapy for large prevalent diseases affecting millions of people. In February 2025, the Company acquired the remaining 81 percent equity interest that it did not already own in GQ Bio Therapeutics GmbH, or GQ Bio (the “GQ Bio Acquisition”), a privately-held biopharmaceutical company, which included the novel HCAd platform, a preclinical portfolio of HCAd-based assets and research and development talent.
Pacira is subject to risks common to companies in similar industries and stages, including, but not limited to, competition from larger companies and potential generic entrants, reliance on revenue from two commercialized products, reliance on a limited number of wholesalers, reliance on a limited number of manufacturing sites, new technological innovations, dependence on key personnel, reliance on third-party service providers and sole source suppliers, tariffs, protection of proprietary technology, compliance with government regulations and risks related to cybersecurity.
The Company divested iovera®°, a handheld cryoanalgesia device that delivers immediate, long-acting, drug-free pain control using precise, controlled doses of cold temperature to a targeted nerve, to Zimmer, Inc., or Zimmer, a subsidiary of Zimmer Biomet Holdings, Inc. on July 31, 2026. For more information, see Note 3, Assets and Liabilities Held for Sale.
NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
These interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP, and in accordance with the rules and regulations of the United States Securities and Exchange Commission, for interim reporting. Pursuant to these rules and regulations, certain information and footnote disclosures normally included in complete annual financial statements have been condensed or omitted. Therefore, these interim condensed consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Annual Report”).
The condensed consolidated financial statements at June 30, 2026, and for the three and six-month periods ended June 30, 2026 and 2025, are unaudited, but include all adjustments (consisting of only normal recurring adjustments) which, in the opinion of management, are necessary to present fairly the financial information set forth herein in accordance with GAAP. The condensed consolidated balance sheet at December 31, 2025 is derived from the audited consolidated financial statements included in the Company’s 2025 Annual Report. The accounts of wholly-owned subsidiaries are included in the condensed consolidated financial statements. The condensed consolidated financial statements as presented reflect certain reclassifications from previously issued financial statements to conform to the current presentation. Intercompany accounts and transactions have been eliminated in consolidation.
The results of operations for these interim periods are not necessarily indicative of results that may be expected for any other interim periods or for the full year.
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Assets and Liabilities Held for Sale
Assets and liabilities available for sale and expected to be sold within one year are classified as either assets or liabilities held for sale on the condensed consolidated balance sheets at the lower of their carrying value or fair value less any costs to sell. Any loss, or gain up until any previously recorded loss, is recognized in the period in which the held for sale criteria are met. The Company will recognize contingent consideration related to the sale of a business as a gain contingency. Under this policy, contingent consideration is excluded from the initial measurement of gain or loss upon the divestiture of a business and is recognized in earnings when the contingency is resolved and the consideration becomes realizable.
In June 2026, the Company agreed to divest its cryoanalgesia business—including iovera°—to Zimmer and reclassified certain of its assets and liabilities to assets and liabilities held for sale. For more information, refer to Note 3, Assets and Liabilities Held for Sale.
Stock-Based Compensation
The Company grants performance share units, or PSUs, under its Amended and Restated 2011 Stock Incentive Plan to certain of its employees, including its executive officers. The expense associated with these awards is recognized in the Company’s consolidated statements of operations based on their grant date fair values at the closing price of the Company’s common stock on the date of grant. The expense is recognized over a four-year service period using graded vesting based on the Company’s interim estimates of achievement of a stated performance objective during the one year period subsequent to the grant date. Changes in estimates are recorded on a cumulative catch-up basis. After the one year performance period, the number of shares the employee is entitled to is fixed.
Concentration of Major Customers
The table below includes the percentage of revenues comprised by the Company’s three largest wholesalers in each period presented:

| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2026 |  | 2025 |  | 2026 |  | 2025
Largest wholesaler | 30% |  | 31% |  | 31% |  | 32%
Second largest wholesaler | 25% |  | 26% |  | 25% |  | 26%
Third largest wholesaler | 21% |  | 21% |  | 22% |  | 21%
Total | 76% |  | 78% |  | 78% |  | 79%

Recent Accounting Pronouncements Not Adopted as of June 30, 2026
In November 2024, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses. The ASU amendment improves financial reporting by requiring public business entities to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The ASU’s amendments are effective for annual reporting periods beginning after December 31, 2026 and interim periods beginning after December 15, 2027, with early adoption permitted. This ASU amendment can be applied on a prospective basis or retrospectively. The Company is currently evaluating the impact of adopting ASU 2024-03 on its consolidated financial statements and disclosures.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40), Targeted Improvements to the Accounting for Internal-Use Software. The ASU amendment removed all references to prescriptive and sequential software development stages (referred to as project stages) throughout Subtopic 350-40. This had been replaced by the requirement to start capitalizing software costs when both of the following occur: (i) management has authorized and committed to funding a software project, and (ii) it is probable that the project will be completed and the software will be used to perform the function intended (referred to as the “probable-to-complete recognition threshold”). The ASU’s amendments are effective for fiscal years beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The ASU’s amendments may be adopted on a prospective, modified transition approach that is based on the status of a current project and whether software costs were capitalized before the date of adoption or retrospective basis. The Company is currently evaluating the impact of adopting ASU 2025-06 on its consolidated financial statements.
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In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832), Accounting for Government Grants Received by Business Entities. The ASU provides the recognition requirements for a government grant received, including guidance for grants related to an asset and grants related to income. The amendments introduce two permitted approaches for asset-related grants: a deferred income approach or a cost accumulation approach. The guidance is effective for fiscal years beginning after December 15, 2028, including interim periods within those fiscal years. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. This ASU provides for adoption either on a modified prospective, modified retrospective, or retrospective basis. The Company is currently evaluating the impact of adopting ASU 2025-10 on its consolidated financial statements.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The ASU is intended to update the guidance in Topic 270 by improving navigability of the required interim disclosures and establishing a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The ASU will be effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted at any time prior to the effective date and should be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting ASU 2025-11 on its consolidated financial statements.
NOTE 3—ASSETS AND LIABILITIES HELD FOR SALE
In June 2026, the Company and Pacira CryoTech, Inc.—its wholly-owned subsidiary (the “Subsidiary”)—entered into a Stock and Asset Purchase Agreement (the “Purchase Agreement”) with Zimmer, a subsidiary of Zimmer Biomet Holdings, Inc. Pursuant to the Purchase Agreement, the Company agreed to divest to Zimmer (i) all of the issued and outstanding capital stock of the Subsidiary and (ii) certain assets and liabilities of the Company and certain of its subsidiaries relating to the Company’s handheld cryoanalgesia devices and related products—including iovera° (the “Transaction”)—for up to $140.0 million, including an upfront payment of $70.0 million, subject to customary adjustments for cash, accounts receivable, indebtedness, transaction expenses and inventory.
In June 2026, the iovera° assets and liabilities included in the Purchase Agreement were reclassified to assets and liabilities held for sale due to meeting the required held for sale criteria. As of June 30, 2026, assets held for sale of $67.3 million consisted of $53.3 million of intangible assets, $9.8 million of inventory, $3.7 million of accounts receivable and $0.5 million of fixed assets, net of depreciation. As of June 30, 2026, liabilities held for sale of $0.7 million consisted of accrued expenses. The Company determined that the held for sale disposal group was not impaired because its fair value less the cost to sell exceeded its carrying value.
The Purchase Agreement provides for potential contingent consideration of up to an additional $70.0 million in the aggregate, payable upon the achievement of the following revenue-based milestones (in each case, excluding any net revenue previously applied towards the achievement of any other milestone threshold) up to and through the period ending December 31, 2031:
•If net revenue from the sale of the current version of iovera° available for sale to end users as of the closing date of the Transaction (the “Business Products”) during any of the five (5) calendar year periods commencing on January 1, 2027 through December 31, 2031 (each an “Applicable Milestone Period”) equals or exceeds $50.0 million, the Company will receive $18.5 million.
•If net revenue from the sale of the Business Products during any Applicable Milestone Period equals or exceeds $60.0 million, the Company will receive $23.5 million.
•If net revenue from the sale of the Business Products during any Applicable Milestone Period equals or exceeds $70.0 million, the Company will receive $28.0 million.
•If net revenue from the sale of the Business Products during any single year equals or exceeds the sum of any two or more milestones, then the highest applicable milestone payment shall be paid with respect to such year.
The Company determined that execution of the Purchase Agreement did not qualify as discontinued operations since it did not have a major effect on the Company’s operations and financial results.
The Transaction closed on July 31, 2026 in which the Company received cash of $73.6 million, after customary purchase price adjustments. The $70.0 million of additional contingent milestones will be recognized in the period if and when they are each earned. As part of the Transaction, there are $2.2 million of transaction bonuses payable to certain employees of the Company that were hired by Zimmer at close that the Company will record as an expense in the third quarter of 2026. The $2.2 million of transaction bonuses will be paid by Zimmer.
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Upon the close of the Transaction on July 31, 2026, the Company entered into a transitional services arrangement, pursuant to which the Company will provide recordkeeping and other services; a development and commercialization agreement, pursuant to which both parties intend to continue the label expansion of iovera° in the field of spasticity through United States Food and Drug Administration, or FDA, approval; and a sublease agreement, all of which are expected to operate through 2028.
NOTE 4—REVENUE
Revenue from Contracts with Customers
The Company’s net product sales are primarily within the U.S. and consist of EXPAREL, ZILRETTA, and sales of bupivacaine liposome injectable suspension for veterinary use. Royalty revenues are related to a collaborative licensing agreement from the sale of the Company’s bupivacaine liposome injectable suspension for veterinary use. In June 2026, the Company entered into the Purchase Agreement with Zimmer to divest iovera°. The Transaction closed on July 31, 2026, and as such, the Company will no longer recognize revenue associated with iovera° after this date. For additional information, see Note 3, Assets and Liabilities Held for Sale. The Company does not consider revenue from sources other than sales of EXPAREL and ZILRETTA to be material sources of its consolidated revenue. As such, the following disclosure is limited to revenue associated with net product sales of EXPAREL and ZILRETTA.
Net Product Sales
The Company sells EXPAREL through a drop-ship program under which orders are processed through wholesalers based on orders of the product placed by end-users, namely hospitals, ambulatory surgery centers and healthcare provider offices. EXPAREL is delivered directly to the end-user without the wholesaler ever taking physical possession of the product. The Company primarily sells ZILRETTA to specialty distributors and specialty pharmacies, who then subsequently resell ZILRETTA to physicians, clinics and certain medical centers or hospitals. The Company also contracts directly with healthcare providers and intermediaries such as group purchasing organizations, or GPOs. Product revenue is recognized when control of the promised goods are transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring those goods. EXPAREL and ZILRETTA revenue is recorded at the time the products are transferred to the customer.
Revenues from sales of products are recorded net of returns allowances, prompt payment discounts, service fees, government rebates, customer rebates and chargebacks. These reserves are based on estimates of the amounts earned or to be claimed on the related sales. These amounts are treated as variable consideration, estimated and recognized as a reduction of the transaction price at the time of the sale, using the most likely amount method, except for returns, which is based on the expected value method. The Company includes these estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized for such transaction will not occur, or when the uncertainty associated with the variable consideration is resolved.
Chargebacks for fees and discounts represent the estimated obligations resulting from contractual commitments to sell products to Department of Veterans Affairs hospitals, participating GPO members, 340B qualified entities and other contracted customers at prices lower than the list price. The 340B Drug Discount Program is a U.S. federal government program that requires participating drug manufacturers to provide outpatient drugs to eligible health care organizations and covered entities at reduced prices. Customers claim the difference between the amount invoiced and the discounted selling price through a chargeback issued by a wholesaler. Reserves are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and trade receivables, net. Chargeback amounts are determined at the time of sale and the Company generally issues credits for such amounts within weeks of receiving notification from a wholesaler. Reserves for chargebacks consist of anticipated credits the Company expects to issue based on expected units sold and chargebacks that customers have claimed for which credits have not yet been issued.
The calculation for some of these items requires management to make estimates based on sales data, historical return data, contracts, statutory requirements and other related information that may become known in the future. The adequacy of these provisions is reviewed on a quarterly basis.
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Accounts Receivable
The majority of accounts receivable arise from product sales and represent amounts due from wholesalers, hospitals, ambulatory surgery centers, specialty distributors, specialty pharmacies and individual physicians. Payment terms generally range from zero to four months from the date of the transaction, and accordingly, there is no significant financing component.
Performance Obligations
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in Accounting Standards Codification, or ASC, 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.
At contract inception, the Company assesses the goods promised in its contracts with customers and identifies a performance obligation for each promise to transfer to the customer a good that is distinct. When identifying individual performance obligations, the Company considers all goods promised in the contract regardless of whether explicitly stated in the customer contract or implied by customary business practices. The Company’s contracts with customers require it to transfer an individual distinct product, which represents a single performance obligation. The Company’s performance obligation with respect to its product sales is satisfied at a point in time, which transfers control upon delivery of EXPAREL and ZILRETTA to its customers. The Company considers control to have transferred upon delivery because the customer has legal title to the asset, physical possession of the asset has been transferred, the customer has significant risks and rewards of ownership of the asset and the Company has a present right to payment at that time.
Disaggregated Revenue
The following table represents disaggregated net product sales in the periods presented as follows (in thousands):

| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2026 |  | 2025 |  | 2026 |  | 2025
Net product sales: |  |  |  |  |  |  |
EXPAREL | $ | 147,823 |  |  | $ | 142,917 |  |  | $ | 291,097 |  |  | $ | 279,446 |
ZILRETTA | 32,648 |  |  | 31,334 |  |  | 59,415 |  |  | 54,672 |
iovera° (1) | 6,806 |  |  | 5,588 |  |  | 12,982 |  |  | 10,711 |
Bupivacaine liposome injectable suspension | 3,216 |  |  | 508 |  |  | 4,375 |  |  | 3,112 |
Total net product sales | $ | 190,493 |  |  | $ | 180,347 |  |  | $ | 367,869 |  |  | $ | 347,941 |

(1) In June 2026, the Company entered into the Purchase Agreement with Zimmer to divest iovera°. The Transaction closed on July 31, 2026, after which the Company will no longer recognize revenue associated with iovera°. For more information, see Note 3, Assets and Liabilities Held for Sale.
NOTE 5—INVENTORIES
The components of inventories, net are as follows (in thousands):

| June 30, |  | December 31,
| 2026 |  | 2025
Raw materials | $ | 28,160 |  |  | $ | 43,335 |
Work-in-process | 38,096 |  |  | 28,201 |
Finished goods | 68,319 |  |  | 81,327 |
Total | $ | 134,575 |  |  | $ | 152,863 |

In June 2026, $9.8 million of inventories related to iovera°, comprised of $5.6 million of raw materials, $1.2 million of work-in-process and $3.0 million of finished goods, were reclassified to assets held for sale in conjunction with entering into the Purchase Agreement with Zimmer. For more information, see Note 3, Assets and Liabilities Held for Sale.
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NOTE 6—FIXED ASSETS
Fixed assets, net, summarized by major category, consist of the following (in thousands):

| June 30, |  | December 31,
| 2026 |  | 2025
Machinery and equipment | $ | 162,840 |  |  | $ | 163,144 |
Leasehold improvements | 77,653 |  |  | 77,450 |
Computer equipment and software | 26,979 |  |  | 26,187 |
Office furniture and equipment | 2,101 |  |  | 2,127 |
Construction in progress | 11,584 |  |  | 9,485 |
Total | 281,157 |  |  | 278,393 |
Less: accumulated depreciation | (150,880) |  |  | (137,703) |
Fixed assets, net | $ | 130,277 |  |  | $ | 140,690 |

In June 2026, $0.5 million of fixed assets related to iovera°, comprised of $0.5 million of machinery and equipment, net, along with nominal amounts of computer equipment and software, net, and office furniture and equipment, net, were reclassified to assets held for sale in conjunction with entering into the Purchase Agreement with Zimmer. Depreciation on these fixed assets ceased being recorded at the time the assets were classified as held for sale. For more information, see Note 3, Assets and Liabilities Held for Sale.
For the three and six months ended June 30, 2026, depreciation expense was $7.0 million and $14.0 million, respectively. For the three and six months ended June 30, 2025, depreciation expense was $13.0 million and $19.8 million, respectively.
The Company recognized $5.5 million of accelerated depreciation expense during the three and six months ended June 30, 2025 as a result of decommissioning its 45-liter EXPAREL batch manufacturing suite located at its Science Center Campus in San Diego, California. The Company continues to operate its 200-liter EXPAREL batch manufacturing suite at the same facility.
As of June 30, 2026 and December 31, 2025, total fixed assets, net, includes manufacturing process equipment and leasehold improvements located outside of the U.S. in the amount of $38.0 million and $41.9 million, respectively.
As of June 30, 2026 and December 31, 2025, the Company had asset retirement obligations of $4.1 million and $3.9 million, respectively, included in accrued expenses and other liabilities on its condensed consolidated balance sheets, for costs associated with returning leased spaces to their original condition upon the termination of certain of its lease agreements.
NOTE 7—LEASES
The Company leases all of its facilities, including its EXPAREL and iovera° handpiece manufacturing and research facilities at its Science Center Campus in San Diego, California. In April 2025, the Company moved its principal executive offices and corporate headquarters to Brisbane, California and in June 2026, the Company entered into a new lease in Brisbane, California to retain this office through 2036. The Company also has two embedded leases with Thermo Fisher Scientific Pharma Services, or Thermo Fisher, for the use of their manufacturing facility in Swindon, U.K. for the production of EXPAREL and ZILRETTA. A portion of the associated monthly base fees have been allocated to the lease components based on a relative fair value basis. As part of the GQ Bio Acquisition in February 2025, the Company assumed GQ Bio’s European offices that include a research and development lab and offices in Luckenwalde, Germany.
Between February 2023 and April 2025, the Company had been recognizing sublease income for a portion of office space leased in Burlington, Massachusetts that was assumed as part of the Flexion Acquisition.
In June 2026, the Company entered into the Purchase Agreement with Zimmer to divest iovera°. The Transaction closed on July 31, 2026, upon which the Company also entered into a sublease agreement through 2028. For more information, see Note 3, Assets and Liabilities Held for Sale.
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The operating lease costs for the facilities include lease and non-lease components, such as common area maintenance and other common operating expenses, along with executory costs such as insurance and real estate taxes. Total operating lease expense, net is as follows (in thousands):

|  | Three Months Ended |  | Six Months Ended
|  | June 30, |  | June 30,
|  | 2026 |  | 2025 |  | 2026 |  | 2025
Fixed lease costs |  | $ | 3,188 |  |  | $ | 3,232 |  |  | $ | 6,323 |  |  | $ | 6,534 |
Variable lease costs |  | 620 |  |  | 576 |  |  | 1,180 |  |  | 1,115 |
Sublease income |  | — |  |  | (19) |  |  | — |  |  | (76) |
Total |  | $ | 3,808 |  |  | $ | 3,789 |  |  | $ | 7,503 |  |  | $ | 7,573 |

Supplemental cash flow information related to operating leases is as follows (in thousands):

|  | Six Months Ended
|  | June 30,
|  | 2026 |  | 2025
Cash paid for operating lease liabilities, net of lease incentives |  | $ | 6,466 |  |  | $ | 6,458 |
Right-of-use assets recorded in exchange for lease obligations |  | $ | 7,962 |  |  | $ | 1,875 |

The Company has elected to net the reduction of the right-of-use asset and the reduction of the lease liability principal in other liabilities in the condensed consolidated statements of cash flows.
The Company has measured its operating lease liabilities at an estimated discount rate at which it could borrow on a collateralized basis over the remaining term for each operating lease. The weighted average remaining lease terms and the weighted average discount rates are summarized as follows:

|  | June 30,
|  | 2026 |  | 2025
Weighted average remaining lease term |  | 4.94 years |  | 4.79 years
Weighted average discount rate |  | 6.98 | % |  | 6.91 | %

Maturities of the Company’s operating lease liabilities are as follows (in thousands):

Year |  | Aggregate Minimum Payments Due
2026 (remaining six months) |  | $ | 6,284 |
2027 |  | 13,268 |
2028 |  | 12,239 |
2029 |  | 12,159 |
2030 |  | 6,995 |
Thereafter |  | 8,020 |
Total future lease payments |  | 58,965 |
Less: imputed interest |  | (9,972) |
Total operating lease liabilities |  | $ | 48,993 |

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NOTE 8—GOODWILL AND INTANGIBLE ASSETS
Goodwill
The Company’s goodwill arose from the GQ Bio Acquisition in February 2025. As of June 30, 2026 and December 31, 2025, the goodwill balance was $19.6 million and $20.2 million, respectively. The change in the goodwill balance from December 31, 2025 was due to $0.6 million in foreign currency translation adjustments.
The Company previously had goodwill resulting from the acquisition of Pacira Pharmaceuticals, Inc. (the Company’s California operating subsidiary) from SkyePharma Holding, Inc. (now a subsidiary of Vectura Group plc, a subsidiary of Molex Asia Holdings Ltd.) in 2007, the acquisition of MyoScience, Inc. (the “MyoScience Acquisition”) in 2019 and the Flexion Acquisition in 2021. Accumulated goodwill impairment charges through June 30, 2026 were $163.2 million.
Intangible Assets
Intangible assets, net, consists of in-process research and development, or IPR&D, from the GQ Bio Acquisition and Flexion Acquisition, developed technology from the Flexion Acquisition and MyoScience Acquisition and customer relationships from the MyoScience Acquisition. In June 2026, $53.2 million, net, of developed technologies and a nominal amount of customer relationships related to iovera° from the MyoScience Acquisition were reclassified to assets held for sale in conjunction with entering into the Purchase Agreement with Zimmer. Amortization on these intangible assets ceased being recorded at the time the assets were classified as held for sale. For more information, see Note 3, Assets and Liabilities Held for Sale.
Intangible assets, net, as of June 30, 2026 are summarized as follows (dollar amounts in thousands):

June 30, 2026 |  | Gross Carrying Value |  | Accumulated Amortization |  | Intangible Assets, Net |  | Weighted-Average Useful Lives
Developed technologies |  | $ | 480,000 |  |  | $ | (228,085) |  |  | $ | 251,915 |  |  | 9 years, 9 months
Acquired IPR&D (1) |  | 33,569 |  |  | — |  |  | 33,569 |  |  |
Total intangible assets, net |  | $ | 513,569 |  |  | $ | (228,085) |  |  | $ | 285,484 |  |  |
(1) The change in the gross carrying value compared to December 31, 2025 reflects the impact of foreign currency translation adjustments related to the IPR&D acquired from the GQ Bio Acquisition.

December 31, 2025 |  | Gross Carrying Value |  | Accumulated Amortization |  | Intangible Assets, Net |  | Weighted-Average Useful Lives
Developed technologies |  | $ | 590,000 |  |  | $ | (256,213) |  |  | $ | 333,787 |  |  | 10 years, 5 months
Customer relationships |  | 90 |  |  | (61) |  |  | 29 |  |  | 10 years
Total finite-lived intangible assets, net |  | 590,090 |  |  | (256,274) |  |  | 333,816 |  |  |
Acquired IPR&D |  | 34,284 |  |  | — |  |  | 34,284 |  |  |
Total intangible assets, net |  | $ | 624,374 |  |  | $ | (256,274) |  |  | $ | 368,100 |  |  |

Amortization expense on intangible assets was $14.3 million for both the three months ended June 30, 2026 and 2025. Amortization expense on intangible assets was $28.6 million for both the six months ended June 30, 2026 and 2025.
Assuming no changes in the gross carrying amount of these intangible assets, the future estimated amortization expense on the finite-lived intangible assets will be $24.7 million for the remaining six months of 2026, $49.4 million each year from 2027 to 2030, and $29.5 million in 2031.
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NOTE 9—ACCRUED EXPENSES
Accrued expenses consist of the following (in thousands):

| June 30, |  | December 31,
| 2026 |  | 2025
Accrued selling, general and administrative expenses | $ | 26,080 |  |  | $ | 17,429 |
Accrued research and development expenses | 8,243 |  | 6,129
Accrued production costs | 10,494 |  | 9,002
Other accrued operating expenses | 8,235 |  | 12,864
Compensation and benefits | 26,987 |  | 37,841
Accrued interest | 778 |  | 782
Product returns and wholesaler service fees | 12,682 |  | 11,554
Total | $ | 93,499 |  |  | $ | 95,601 |

In June 2026, $0.7 million of accrued expenses related to iovera°, comprised of $0.5 million of other accrued operating expenses and $0.2 million of product returns and wholesaler services, were reclassified to liabilities held for sale in conjunction with entering into the Purchase Agreement with Zimmer. For more information, see Note 3, Assets and Liabilities Held for Sale.
NOTE 10—DEBT
The carrying value of the Company’s outstanding debt is summarized as follows (in thousands):

| June 30, |  | December 31,
| 2026 |  | 2025
2.125% Convertible senior notes due May 2029 | $ | 282,124 |  |  | $ | 281,189 |
Revolving Credit Facility | 81,000 |  |  | 91,000 |
Total | $ | 363,124 |  |  | $ | 372,189 |

Convertible Senior Notes Due 2029
In May 2024, the Company completed a private placement of $287.5 million in aggregate principal amount of its 2.125% convertible senior notes due 2029, or 2029 Notes, and entered into an indenture with Computershare Corporate Trust, N.A., or 2029 Indenture, with respect to the 2029 Notes. The 2029 Notes accrue interest at a fixed rate of 2.125% per year, payable semiannually in arrears on May 15 th and November 15 th of each year. The 2029 Notes mature on May 15, 2029.
The total debt composition of the 2029 Notes was as follows (in thousands):

| June 30, |  | December 31,
| 2026 |  | 2025
2.125% convertible senior notes due May 2029 | $ | 287,500 |  |  | $ | 287,500 |
Deferred financing costs | (5,376) |  |  | (6,311) |
Total debt, net of deferred financing costs | $ | 282,124 |  |  | $ | 281,189 |

As of June 30, 2026, the 2029 Notes had a market price of $999 per $1,000 principal amount. In the event of conversion, holders would forgo all future interest payments, any unpaid accrued interest and the possibility of further stock price appreciation. Upon the receipt of conversion requests, the settlement of the 2029 Notes will be paid pursuant to the terms of the 2029 Indenture. In the event that all of the 2029 Notes are converted, the Company would be required to repay the $287.5 million in principal value in cash, whereas any conversion premium would be required to be repaid in any combination of cash and shares of its common stock (at the Company’s option).
Prior to the close of business on the business day immediately preceding November 15, 2028, the 2029 Notes are convertible only under the following circumstances: (i) during any calendar quarter commencing after the calendar quarter ending on June 30, 2024 (and only during such calendar quarter), if the last reported sale price of the Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is equal to or greater than 130% of the conversion price on each applicable trading
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day; (ii) during the five business-day period after any five consecutive trading-day period (the “measurement period”) in which the trading price per $1,000 principal amount of the 2029 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; (iii) upon the occurrence of specified corporate events; or (iv) upon a Company redemption. On or after November 15, 2028, until the close of business on the second scheduled trading day immediately preceding May 15, 2029, holders of the 2029 Notes may convert all or a portion of their 2029 Notes, at any time. No sinking fund is provided for the 2029 Notes. As of June 30, 2026, the conditions for conversion were not met.
Upon conversion, holders will receive the principal amount of their 2029 Notes and any excess conversion value, calculated based on the per share volume-weighted average price for each of the 50 consecutive trading days during the observation period (as more fully described in the 2029 Indenture). For the principal, the Company will settle in cash per the terms of the 2029 Notes. For any excess conversion value, holders may receive cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s option. The initial conversion rate for the 2029 Notes is 25.2752 shares of common stock per $1,000 principal amount, which is equivalent to an initial conversion price of $39.56 per share of the Company’s common stock. The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. The initial conversion price of the 2029 Notes represents a premium of approximately 32.5% to the closing sale price of $29.86 per share of the Company’s common stock on the Nasdaq Global Select Market on May 9, 2024, the date that the Company priced the private offering of the 2029 Notes.
On or after May 17, 2027 and on or before the 50 th scheduled trading day immediately before the maturity date, the Company may redeem for cash all or part of the 2029 Notes if (i) the 2029 Notes are “freely tradable” (as defined in the 2029 Indenture) and any accrued and unpaid additional interest has been paid as of the date the Company sends the related notice of the redemption and (ii) the last reported sales price of the Company’s common stock exceeds 130% of the conversion price then in effect for (1) each of at least 20 trading days (whether or not consecutive) during any 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related notice of the redemption; and (2) the trading day immediately before the date the Company sends such notice. The redemption price of each 2029 Note to be redeemed will be the principal amount of such 2029 Note, plus accrued and unpaid interest, if any. In addition, calling any 2029 Notes for redemption will constitute a make-whole fundamental change, in which case the conversion rate applicable to those 2029 Notes, if converted in connection with the redemption, will be increased in certain circumstances. Upon the occurrence of a “make-whole fundamental change” (as defined in the 2029 Indenture), subject to a limited exception for certain cash mergers, holders may require the Company to repurchase all or a portion of their 2029 Notes for cash at a price equal to 100% of the principal amount of the 2029 Notes to be repurchased plus any accrued and unpaid interest.
While the 2029 Notes are currently classified on the Company’s condensed consolidated balance sheet at June 30, 2026 as long-term debt, the future convertibility and resulting balance sheet classification of this liability is monitored at each quarterly reporting date and is analyzed dependent upon market prices of the Company’s common stock during the prescribed measurement periods. In the event that the holders of the 2029 Notes have the election to convert the 2029 Notes at any time during the prescribed measurement period, the 2029 Notes would then be considered a current obligation and classified as such.
On May 9, 2024, in connection with the pricing of the 2029 Notes, and on May 10, 2024, in connection with the exercise in full by the initial purchasers of the 2029 Notes (the “Initial Purchasers”) of their option to purchase additional 2029 Notes, the Company entered into privately negotiated capped call transactions (the “Capped Call Transactions”) with certain of the Initial Purchasers of the 2029 Notes and/or their respective affiliates and/or other financial institutions (the “Option Counterparties”). The Capped Call Transactions are expected to cover, subject to anti-dilution adjustments substantially similar to those applicable to the 2029 Notes, the number of shares of the Company’s common stock underlying the 2029 Notes.
The Capped Call Transactions are expected to reduce the potential dilution to the Company’s common stock upon any conversion of the 2029 Notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of converted 2029 Notes, as the case may be, upon any conversion of the 2029 Notes, with such reduction and/or offset subject to a cap. The cap price of the Capped Call Transactions will initially be approximately $53.75 per share, representing a premium of approximately 80% over the closing price of $29.86 per share of the Company’s common stock on May 9, 2024, and is subject to certain adjustments under the terms of the Capped Call Transactions. During the year ended December 31, 2024, the capped call was recorded as a reduction to additional paid-in capital at its cost of $26.7 million, partially offset by a $6.5 million deferred tax asset.
The Capped Call Transactions are separate transactions entered into by the Company with the Option Counterparties, are not part of the terms of the 2029 Notes and will not affect any holder’s rights under the 2029 Notes. Holders of the 2029 Notes will not have any rights with respect to the Capped Call Transactions.
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Revolving Credit Facility
On July 3, 2025, the Company entered into a credit agreement (the “Credit Agreement”) with Wells Fargo Bank, N.A., as administrative agent, swingline lender and an issuing bank, and certain lenders, to, among other things, retire the indebtedness outstanding under the Company’s then-existing TLA Credit Agreement and provide ongoing working capital.
The Credit Agreement provides for a senior secured revolving credit facility (the “Revolving Credit Facility”) in an aggregate commitment amount of $300.0 million, with a letter of credit sublimit of $10.0 million and swingline loan sublimit of $15.0 million. The credit facility is secured by substantially all of the Company’s and each subsidiary guarantor’s assets and is scheduled to mature on July 3, 2030, subject to certain exceptions set forth in the Credit Agreement. Subject to certain conditions, the Company may, at any time, on one or more occasions, add one or more new classes of term facilities and/or increase the principal amount of any existing class of term loans by requesting one or more incremental term facilities in an aggregate principal amount not to exceed the greater of $225.0 million and 100% of Consolidated Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) (as defined in the Credit Agreement).
Each revolving loan borrowing which is an alternate base rate borrowing will bear interest at a rate per annum equal to (i) a base rate, plus (ii) a spread based on the Company’s Senior Secured Net Leverage Ratio (as defined in the Credit Agreement) ranging from 1.50% to 2.25%. Each revolving loan borrowing which is a term benchmark borrowing or daily simple SOFR (as defined in the Credit Agreement) borrowing will bear interest at a rate per annum equal to (i) a forward-looking term rate based on SOFR or a rate determined by reference to the daily simple SOFR, plus (ii) a spread based on the Company’s Senior Secured Net Leverage Ratio ranging from 2.50% to 3.25%.
The Credit Agreement also contains customary affirmative and negative covenants, financial covenants, representations and warranties, events of default and other provisions. As of June 30, 2026, the Company was in compliance with all covenants under the Credit Agreement.
During the year ended December 31, 2025, the Company incurred financing fees of approximately $2.1 million which were recorded as a noncurrent other asset on the Company’s condensed consolidated balance sheet. The financing fees are amortized over the term of the Credit Agreement.
Upon entering into the Credit Agreement, the Company borrowed $101.0 million under the Revolving Credit Facility, of which $81.0 million is outstanding as of June 30, 2026 after the Company made repayments of $10.0 million during the six months ended June 30, 2026 and $10.0 million during the year ended December 31, 2025.
As of June 30, 2026, borrowings under the Revolving Credit Facility consisted entirely of term SOFR borrowings at an approximate all-in rate of 6.72%.
2028 Term Loan A Facility
On March 31, 2023, the Company entered into a credit agreement (as amended and/or restated to date, the “TLA Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent, and certain lenders. The term loan issued under the TLA Credit Agreement (the “TLA Term Loan”) was issued at a 0.30% discount and provided for a single-advance term loan A facility in the principal amount of $150.0 million, which was secured by substantially all of the Company’s and any subsidiary guarantor’s assets. The net proceeds of the TLA Term Loan were approximately $149.6 million after deducting an original issue discount of $0.4 million.
The TLA Term Loan was scheduled to mature on March 31, 2028 and the TLA Credit Agreement required quarterly repayments of principal in the amount of $2.8 million which commenced on June 30, 2023 and increased to $3.8 million on March 31, 2025, with an originally stated balloon payment of approximately $85.3 million due at maturity.
On July 3, 2025, the Company used a portion of the $300.0 million of Revolving Credit Facility to repay the remaining indebtedness outstanding under the TLA Credit Agreement, which consisted of $98.8 million and its final interest payment of $0.1 million, and terminated the TLA Credit Agreement. The Company did not incur any prepayment penalties or fees in connection with the termination of the TLA Credit Agreement. The prepayment resulted in a loss on early extinguishment of debt of approximately $1.0 million which was recognized during the three months ended September 30, 2025. Prior to the TLA Credit Agreement extinguishment, the Company made voluntary principal prepayments of $6.6 million during the year ended December 31, 2025.
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Convertible Senior Notes Due 2025
In July 2020, the Company completed a private placement of $402.5 million in aggregate principal amount of 0.750% convertible senior notes due 2025, or 2025 Notes, and entered into an indenture with Computershare Corporate Trust, N.A. (formerly Wells Fargo Bank, N.A.), with respect to the 2025 Notes. The 2025 Notes accrued interest at a fixed rate of 0.750% per year, which was payable semiannually in arrears on February 1 st and August 1 st of each year.
In May 2024, the Company used part of the net proceeds from the issuance of the 2029 Notes to repurchase $200.0 million aggregate principal amount of the 2025 Notes in privately negotiated transactions at a discount for $191.4 million in cash (including accrued interest). The partial repurchase of the 2025 Notes resulted in a $7.5 million gain on early extinguishment of debt during the year ended December 31, 2024.
On August 1, 2025, the 2025 Notes matured and the Company settled the remaining outstanding principal balance of $202.5 million in cash. Upon the maturity of the 2025 Notes, a nominal gain on extinguishment of debt was recognized due to certain holders having converted their 2025 Notes.
Interest Expense
The following table sets forth the total interest expense recognized in the periods presented (dollar amounts in thousands):

| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2026 |  | 2025 |  | 2026 |  | 2025
Contractual interest expense | $ | 3,045 |  |  | $ | 3,823 |  |  | $ | 6,167 |  |  | $ | 7,685 |
Amortization of debt issuance costs | 521 |  |  | 849 |  |  | 1,042 |  |  | 1,694 |
Amortization of debt discount | 56 |  |  | 23 |  |  | 112 |  |  | 45 |
Capitalized interest (Note 6) | — |  |  | — |  |  | — |  |  | (149) |
Total | $ | 3,622 |  |  | $ | 4,695 |  |  | $ | 7,321 |  |  | $ | 9,275 |
Effective interest rate on total debt | 3.72 | % |  | 3.09 | % |  | 3.75 | % |  | 3.10 | %

NOTE 11—FINANCIAL INSTRUMENTS
Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or be paid to transfer a liability in the principal or most advantageous market in an orderly transaction. To increase consistency and comparability in fair value measurements, the FASB established a three-level hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of fair value measurements are:
•Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
•Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.
•Level 3: Unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.
The carrying value of financial instruments including cash and cash equivalents, accounts receivable and accounts payable approximate their respective fair values due to the short-term nature of these items. The Revolving Credit Facility reprices within a maximum of three months due to its variable interest rate terms. The fair value of the Company’s Revolving Credit Facility approximates carrying value (Level 2) due to its repricing feature. The fair value of the Company’s convertible senior notes are calculated utilizing market quotations from an over-the-counter trading market for these notes (Level 2). The fair value of the Company’s acquisition-related contingent consideration is reported at fair value on a recurring basis (Level 3). The carrying amount of equity investments and convertible notes receivable without readily determinable fair values included in investments and other assets on the consolidated balance sheet are recorded at cost minus impairment, if any, plus or minus observable price changes of identical or similar investments.
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At June 30, 2026, the carrying values and fair values of the Company’s financial assets and liabilities were as follows (in thousands):

|  | Carrying Value |  | Fair Value Measurements Using
|  |  | Level 1 |  | Level 2 |  | Level 3
Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis: |  |  |  |  |  |  |  |
Financial Assets: |  |  |  |  |  |  |  |
Equity investments |  | $ | 7,750 |  |  | $ | — |  |  | $ | — |  |  | $ | 7,750 |
Convertible notes receivable |  | $ | 2,500 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,500 |
Financial Liabilities: |  |  |  |  |  |  |  |
Acquisition-related contingent consideration |  | $ | 17,452 |  |  | $ | — |  |  | $ | — |  |  | $ | 17,452 |
Financial Liabilities Measured at Amortized Cost: |  |  |  |  |  |  |  |
2.125% convertible senior notes due 2029 (1) |  | $ | 282,124 |  |  | $ | — |  |  | $ | 287,322 |  |  | $ | — |
Revolving Credit Facility |  | $ | 81,000 |  |  | $ | — |  |  | $ | 81,000 |  |  | $ | — |

(1) The closing price of the Company’s common stock as reported on the Nasdaq Global Select Market was $25.37 per share on June 30, 2026, compared to a conversion price of $39.56 per share. At June 30, 2026, as the conversion price was above the stock price, the requirements for conversion have not been met.
Certain assets and liabilities are measured at fair value on a non-recurring basis, including assets and liabilities acquired in a business combination and long-lived assets, which would be recognized at fair value if deemed impaired. The fair value in these instances would be determined using Level 3 inputs.
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis
Equity and Convertible Note Investments
The Company holds strategic investments in clinical and preclinical stage privately-held biotechnology companies in the form of equity and convertible note investments. For the equity investments as of June 30, 2026, there have not been any impairments or upward adjustments. The following investments have no readily determinable fair value and are recorded at cost minus impairment, if any, plus or minus observable price changes of identical or similar investments (in thousands):

|  | Equity Investments |  | Convertible Notes Receivable |  | Total
Balance at December 31, 2024 |  | $ | 15,877 |  |  | $ | 11,898 |  |  | $ | 27,775 |
Purchases |  | — |  |  | 1,250 |  |  | 1,250 |
Impairments |  | (4,000) |  |  | (7,000) |  |  | (11,000) |
Realized gain of prior investments (1) |  | 4,189 |  |  | 1,674 |  |  | 5,863 |
Settled investments (1) |  | (8,277) |  |  | (5,322) |  |  | (13,599) |
Foreign currency adjustments |  | (39) |  |  | — |  |  | (39) |
Balance at December 31, 2025 |  | 7,750 |  |  | 2,500 |  |  | 10,250 |
— No activity for the six months ended June 30, 2026 — |  | — |  |  | — |  |  | — |
Balance at June 30, 2026 |  | $ | 7,750 |  |  | $ | 2,500 |  |  | $ | 10,250 |

(1) In conjunction with the GQ Bio Acquisition, the settlement of the Company’s prior equity investment and notes receivable were part of the fair value of consideration exchanged. Upon acquiring the remaining 81% ownership interest in GQ Bio, the Company remeasured its previously held equity interest to its acquisition-date fair value. The $4.2 million gain resulting from the equity investment was recognized as other, net within the condensed consolidated statement of operations. In settling the notes receivable, the Company recognized $1.7 million in interest income. These gains were included in the condensed consolidated statement of cash flows for the six months ended June 30, 2025 within other net gains.
During the year ended December 31, 2025, an impairment of an equity investment and convertible note receivable totaling $11.0 million was recorded in other, net in the condensed consolidated statements of operations.
In June 2025, the Company invested $1.3 million in a convertible note receivable related to one of its existing early-stage strategic investments.
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Acquisition-Related Contingent Consideration
The Company has recognized a contingent consideration liability related to the Flexion Acquisition in the amount of $17.5 million and $18.1 million as of June 30, 2026 and December 31, 2025, respectively.
The Company’s contingent consideration obligations are recorded at their estimated fair values and are revalued each reporting period if and until the related contingencies are resolved. The Company has measured the fair value of its contingent consideration using a Monte Carlo simulation. These inputs include, as applicable, estimated forecasts of revenue and costs and the discount rates used to calculate the present value of estimated future payments. Significant changes may increase or decrease the probabilities of achieving the related commercial and regulatory events, shorten or lengthen the time required to achieve such events, or increase or decrease estimated forecasts.
In November 2021, the Company completed the Flexion Acquisition, which provided for contingent consideration related to contingent value rights that were issued to Flexion shareholders and certain equity award holders which could aggregate up to a total of $372.3 million if certain regulatory and commercial milestones are met. The aggregate amount was initially $425.5 million prior to the Company’s September 2022 decision to formally discontinue further development of Flexion’s investigational product candidate, PCRX-301. The Company’s obligation to make milestone payments is limited to those milestones achieved through December 31, 2030, and are to be paid within 60 days of the end of the fiscal quarter of achievement. During the three months ended June 30, 2026, the Company recognized contingent consideration charges of $1.7 million due to revisions to the latest discount rates. During the six months ended June 30, 2026, the Company recognized contingent consideration gains of $0.6 million due to a reduction in its sales forecast through the milestone expiration date of December 31, 2030, partially offset by revisions to the latest discount rates. During the three and six months ended June 30, 2025, the Company recognized contingent consideration gains of $0.4 million and $3.0 million, respectively, due to revisions to the latest discount rates. These adjustments were recorded within other operating expenses, net in the condensed consolidated statements of operations. At June 30, 2026, the weighted average discount rate was 7.8%.
The following table includes the key assumptions used in the valuation of the Company’s contingent consideration:

Assumption |  | Ranges Utilized as of June 30, 2026
Discount rates |  | 7.6% to 8.1%
Probability of payment for remaining regulatory milestones |  | 0%

The change in the Company’s contingent consideration recorded at fair value using Level 3 measurements is as follows (in thousands):

|  | Contingent Consideration Fair Value
Balance at December 31, 2024 |  | $ | 20,241 |
Fair value adjustments and accretion |  | (2,175) |
Balance at December 31, 2025 |  | 18,066 |
Fair value adjustments and accretion |  | (614) |
Balance at June 30, 2026 |  | $ | 17,452 |

Available-for-Sale Investments
Short-term investments consist of asset-backed securities collateralized by credit card receivables, investment grade commercial paper and corporate, federal agency, government and Yankee bonds with maturities greater than three months, but less than one year. Net unrealized gains and losses (excluding credit losses, if any) from the Company’s short-term investments are reported in other comprehensive income (loss). At June 30, 2026 and December 31, 2025, all of the Company’s short-term investments are classified as available-for-sale investments and are determined to be Level 2 instruments which are measured at fair value using standard industry models with observable inputs, with the exception of U.S. government bonds. The fair value of the commercial paper is measured based on a standard industry model that uses the three-month U.S. Treasury bill rate as an observable input. The fair value of the asset-backed securities and corporate bonds is principally measured or corroborated by trade data for identical issues in which related trading activity is not sufficiently frequent to be considered a Level 1 input or that of comparable securities. The fair value of U.S. government bonds is based on level 1 trading activity. At the time of purchase, all available-for-sale investments had an “A” or better rating by Standard & Poor’s.
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The following summarizes the Company’s available-for-sale investments at June 30, 2026 and December 31, 2025 (in thousands):

June 30, 2026 Investments |  | Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  |  |  | Fair Value (Level 2)
Current: |  |  |  |  |  |  |  |  |  |
Commercial paper |  | $ | 27,158 |  |  | $ | — |  |  | $ | (24) |  |  |  |  | $ | 27,134 |
Corporate bonds |  | 18,027 |  |  | — |  |  | (5) |  |  |  |  | 18,022 |
Total |  | $ | 45,185 |  |  | $ | — |  |  | $ | (29) |  |  |  |  | $ | 45,156 |

December 31, 2025 Investments |  | Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  |  |  | Fair Value (Level 2)
Current: |  |  |  |  |  |  |  |  |  |
Commercial paper |  | $ | 54,971 |  |  | $ | 18 |  |  | $ | (13) |  |  |  |  | $ | 54,976 |
Corporate bonds |  | 24,881 |  |  | 22 |  |  | — |  |  |  |  | 24,903 |
Total |  | $ | 79,852 |  |  | $ | 40 |  |  | $ | (13) |  |  |  |  | $ | 79,879 |

At June 30, 2026, there were no investments available for sale that were materially less than their amortized cost.
The Company elects to recognize its interest receivable separate from its available-for-sale investments. At June 30, 2026 and December 31, 2025, the interest receivable from its available-for-sale investments recognized in prepaid expenses and other current assets was $0.2 million and $0.3 million, respectively.
Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, available-for-sale investments and accounts receivable. The Company maintains its cash and cash equivalents with high-credit quality financial institutions. Such amounts may exceed federally-insured limits.
As of June 30, 2026, three wholesalers each accounted for over 10% of the Company’s accounts receivable, at 32%, 27% and 17%, which excludes the amounts that were reclassified to assets held for sale in conjunction with entering into the Purchase Agreement with Zimmer (for more information, see Note 3, Assets and Liabilities Held for Sale). At December 31, 2025, three wholesalers each accounted for over 10% of the Company’s accounts receivable, at 32%, 23% and 17%. For additional information regarding the Company’s wholesalers, see Note 2, Summary of Significant Accounting Policies. EXPAREL and ZILRETTA revenues are primarily derived from major wholesalers and specialty distributors that generally have significant cash resources. The Company performs ongoing credit evaluations of its customers as warranted and generally does not require collateral. Allowances for credit losses on the Company’s accounts receivable are maintained based on historical payment patterns, current and estimated future economic conditions, aging of accounts receivable and its write-off history. As of June 30, 2026, the allowance for credit losses on the Company’s accounts receivable was not material. As of December 31, 2025, there were $0.7 million of allowances for credit losses on the Company’s accounts receivable.
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NOTE 12—STOCKHOLDERS’ EQUITY
Accumulated Other Comprehensive Income
The following tables illustrate the changes in the balances of the Company’s accumulated other comprehensive income for the periods presented (in thousands):

|  | Net Unrealized Gain (Loss) From Available-For-Sale Investments |  | Unrealized Foreign Currency Translation |  | Accumulated Other Comprehensive Income
Balance at December 31, 2025 |  | $ | 97 |  |  | $ | 4,230 |  |  | $ | 4,327 |
Net unrealized loss on investments, net of tax (1) |  | (42) |  |  | — |  |  | (42) |
Foreign currency translation adjustments |  | — |  |  | (1,044) |  |  | (1,044) |
Balance at June 30, 2026 |  | $ | 55 |  |  | $ | 3,186 |  |  | $ | 3,241 |

|  | Net Unrealized Gain (Loss) From Available-For-Sale Investments |  | Unrealized Foreign Currency Translation |  | Accumulated Other Comprehensive Income
Balance at December 31, 2024 |  | $ | 190 |  |  | $ | 153 |  |  | $ | 343 |
Net unrealized loss on investments, net of tax (1) |  | (131) |  |  | — |  |  | (131) |
Foreign currency translation adjustments |  | — |  |  | 3,850 |  |  | 3,850 |
Balance at June 30, 2025 |  | $ | 59 |  |  | $ | 4,003 |  |  | $ | 4,062 |

(1) Net of a nominal tax benefit for both the six months ended June 30, 2026 and 2025, respectively.
Share Repurchase Program
On April 17, 2025, the Company announced that its board of directors approved a share repurchase program which authorizes the Company to repurchase up to an aggregate of $300.0 million of its outstanding common stock. Repurchases under this program may be made at management’s discretion on the open market or through privately negotiated transactions, including plans that comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. The share repurchase program may be suspended or discontinued at any time by the Company and has an expiration date of December 31, 2026. During the six months ended June 30, 2026, the Company repurchased 2,244,553 shares of its common stock through open market transactions for $50.4 million which included less than $0.1 million of broker fees and $0.4 million of accrued excise tax. As of June 30, 2026, $100.0 million remains available for future repurchases under this authorization.
Repurchases of the Company’s common stock are accounted for at cost and recorded as treasury stock. The broker fees incurred and excise tax on repurchases of the Company’s common stock are recorded as a cost of acquiring treasury stock. Any reissued treasury stock will be accounted for at average cost. Gains or losses on reissued treasury stock arising from the difference between the average cost and the fair value of the award will be recorded in additional paid-in capital.
In addition to the Company’s share repurchase plan, during the six months ended June 30, 2026, the Company withheld 366,650 shares of common stock to cover employee tax withholding obligations of $7.8 million for vested restricted stock units. All shares of common stock withheld to cover employee tax withholding obligations are retired and are done so pursuant to the terms of the Company’s stock incentive plans and related equity grant agreements rather than the Company’s share repurchase program. Retired shares of common stock are not available for future issuance under the Company’s stock incentive plans.
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NOTE 13—STOCK PLANS
Stock Incentive Plans
The Pacira BioSciences, Inc. Amended and Restated 2011 Stock Incentive Plan, or 2011 Plan, was originally adopted by the Company’s board of directors and approved by its stockholders in June 2011 and was amended and restated in June 2014, June 2016, June 2019, June 2021, June 2023 and June 2025. The 2011 Plan allows for the granting of incentive stock options, non-statutory stock options, restricted stock units, and other stock-based awards—including PSUs.
The Pacira BioSciences, Inc. Amended and Restated 2014 Inducement Plan, or as amended and restated to date, the A&R Inducement Plan, was originally approved and adopted by the Company’s board of directors in April 2014, pursuant to which awards could be made to new employees as a material inducement to such persons entering into employment with the Company. The A&R Inducement Plan was amended and restated in December 2023, September 2024, January 2025 and January 2026. The January 2026 amendment and restatement added an additional 750,000 shares of the Company’s common stock to bring the total amount of shares reserved for issuance under the A&R Inducement Plan to 3,060,000, of which 703,390 shares remained available for issuance as of June 30, 2026, and extended the term of the A&R Inducement Plan such that it will now expire on January 1, 2036. The A&R Inducement Plan allows for the granting of nonstatutory stock options, restricted stock awards and other stock-based awards.
The A&R Inducement Plan was adopted by the board of directors without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules. In accordance with this rule, awards under the A&R Inducement Plan may only be made to an employee who has not previously been an employee or member of the board of directors or the board of directors or any parent or subsidiary, or following a bona fide period of non-employment by the Company or a parent or subsidiary, if they are granted such award in connection with their commencement of employment with the Company or a subsidiary and such grant is an inducement material to their entering into employment with the Company or such subsidiary.
Inducement Awards
From time to time, the board of directors, upon recommendation of the People and Compensation Committee of the board of directors, has approved individually negotiated grants of options and restricted stock units for certain of the Company’s officers in connection with their respective appointments, in each case, pursuant to the inducement plan in effect at such time.
Stock-Based Compensation
The Company recognized stock-based compensation expense in the periods presented as follows (in thousands):

|  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  | 2026 |  | 2025 |  | 2026 |  | 2025
Cost of goods sold |  | $ | 1,809 |  |  | $ | 1,682 |  |  | $ | 3,452 |  |  | $ | 3,398 |
Research and development |  | 2,605 |  |  | 2,407 |  |  | 4,435 |  |  | 4,648 |
Selling, general and administrative |  | 10,544 |  |  | 11,383 |  |  | 20,610 |  |  | 21,979 |
Total |  | $ | 14,958 |  |  | $ | 15,472 |  |  | $ | 28,497 |  |  | $ | 30,025 |
Stock-based compensation from: |  |  |  |  |  |  |  |
Stock options |  | $ | 2,941 |  |  | $ | 4,309 |  |  | $ | 5,949 |  |  | $ | 8,749 |
Restricted stock units |  | 11,159 |  |  | 10,681 |  |  | 21,303 |  |  | 20,287 |
Performance share units |  | 560 |  |  | — |  |  | 696 |  |  | — |
Employee stock purchase plan share options |  | 298 |  |  | 482 |  |  | 549 |  |  | 989 |
Total |  | $ | 14,958 |  |  | $ | 15,472 |  |  | $ | 28,497 |  |  | $ | 30,025 |

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Equity Awards
The following tables contain information about the Company’s stock option, RSU and PSU activity for the six months ended June 30, 2026:

Stock Options |  | Number of Stock Options |  | Weighted Average Exercise Price (Per Share)
Outstanding at December 31, 2025 |  | 6,374,481 |  |  | $ | 40.65 |
Granted |  | 300,603 |  |  | 22.56 |
Exercised |  | (27,947) |  |  | 16.44 |
Forfeited |  | (90,771) |  |  | 26.77 |
Expired |  | (432,996) |  |  | 44.61 |
Outstanding at June 30, 2026 |  | 6,123,370 |  |  | $ | 39.79 |

|  | Number of |  | Weighted Average Grant Date Fair Value (Per Share)
Stock Awards |  | Restricted Stock Units |  | Performance Share Units |
Unvested at December 31, 2025 |  | 4,160,697 |  |  | — |  |  | $ | 27.87 |
Granted |  | 2,245,413 |  |  | 202,112 |  |  | 21.86 |
Vested |  | (1,205,978) |  |  | — |  |  | 30.60 |
Forfeited |  | (355,041) |  |  | — |  |  | 26.00 |
Unvested at June 30, 2026 |  | 4,845,091 |  |  | 202,112 |  |  | $ | 24.43 |

The weighted average fair value of stock options granted during the six months ended June 30, 2026 was $12.58 per share. The fair values of stock options granted were estimated using the Black-Scholes option valuation model with the following weighted average assumptions:

Black-Scholes Weighted Average Assumptions |  | Six Months Ended June 30, 2026
Expected dividend yield |  | None
Risk-free interest rate |  | 4.10%
Expected volatility |  | 56.6%
Expected term of options |  | 5.74 years

Employee Stock Purchase Plan
In June 2026, the Company’s stockholders approved an amendment to the Company’s Amended and Restated 2014 Employee Stock Purchase Plan, or ESPP. The ESPP was amended to increase the number of shares of common stock that may be sold under the ESPP by an additional 800,000 shares, bringing the total amount of shares reserved for issuance under the ESPP to 1,800,000, of which 869,062 shares remained available for issuance as of June 30, 2026, and extended the term of the ESPP such that it will now expire on June 9, 2036.
The ESPP features two six-month offering periods per year, running from January 1 st to June 30 th and July 1 st to December 31 st. Under the ESPP, employees may elect to contribute after-tax earnings to purchase shares at 85% of the closing fair market value of the Company’s common stock on either the offering date or the purchase date, whichever is lesser. During the six months ended June 30, 2026, 82,837 shares were purchased and issued through the ESPP.
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NOTE 14—NET INCOME (LOSS) PER COMMON SHARE
Basic net income (loss) per common share is calculated by dividing the net income (loss) attributable to common shares by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share is calculated by dividing the net income (loss) attributable to common shares by the weighted average number of common shares outstanding plus dilutive potential common shares outstanding during the period.
Potential common shares include the shares of common stock issuable upon the exercise of outstanding stock options, the vesting of RSUs and PSUs and the purchase of shares from the ESPP (using the treasury stock method), if applicable. Potential common shares associated with convertible senior notes are treated under the if-converted method. Adjustments are made to the diluted net income (loss) per common share calculation as if the Company had converted the convertible senior notes on the first day of each period presented. Adjustments to the numerator are made to add back the interest expense associated with the convertible senior notes on a post-tax basis. Adjustments to the denominator reflect the number of shares assumed to be convertible at the beginning of the period.
Potential common shares are excluded from the diluted net income (loss) per common share computation to the extent they would be antidilutive.
The following table sets forth the computation of basic and diluted net income (loss) per common share for the three and six mon ths ended June 30, 2026 and 2025 (in thousands, except per common share amounts):

| Three Months Ended June 30, |  | Six Months Ended June 30,
2026 |  | 2025 |  | 2026 |  | 2025
Numerator: |  |  |  |  |  |  |
Net income (loss) | $ | 4,653 |  |  | $ | (4,847) |  |  | $ | 7,569 |  |  | $ | (35) |
Denominator: |  |  |  |  |  |  |
Weighted average common shares outstanding—basic | 39,462 |  |  | 45,459 |  |  | 39,961 |  |  | 45,867 |
Computation of diluted securities: |  |  |  |  |  |  |
Dilutive effect of stock options | 30 |  |  | — |  |  | 21 |  |  | — |
Dilutive effect of RSUs | 808 |  |  | — |  |  | 623 |  |  | — |
Weighted average common shares outstanding—diluted | 40,300 |  |  | 45,459 |  |  | 40,605 |  |  | 45,867 |
Net income (loss) per common share: |  |  |  |  |  |  |
Basic and diluted net income (loss) per common share | $ | 0.12 |  |  | $ | (0.11) |  |  | $ | 0.19 |  |  | $ | (0.00) |

The following table summarizes the outstanding stock options, RSUs, ESPP share options and convertible senior notes that were excluded from the diluted net income (loss) per common share calculation because the effects of including these potential shares were antidilutive in the periods presented (in thousands):

| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2026 |  | 2025 |  | 2026 |  | 2025
Weighted average number of stock options | 5,956 |  |  | 6,858 |  |  | 6,029 |  |  | 6,921 |
2025 Notes | — |  |  | 2,821 |  |  | — |  |  | 2,821 |
Weighted average number of RSUs | 2,256 |  |  | 4,703 |  |  | 2,127 |  |  | 4,417 |
Weighted average ESPP share options | 83 |  |  | 101 |  |  | 83 |  |  | 102 |
Total | 8,295 |  |  | 14,483 |  |  | 8,239 |  |  | 14,261 |

The table above does not include contingent shares associated with the 2029 Notes being convertible at a premium, nor does it include PSUs as their performance targets have not yet been achieved.
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NOTE 15—INCOME TAXES
Income (loss) before income taxes and income tax expense are as follows (dollar amounts in thousands):

| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2026 |  | 2025 |  | 2026 |  | 2025
Income (loss) before income taxes: |  |  |  |  |  |  |
Domestic | $ | 5,946 |  |  | $ | (4,214) |  |  | $ | 10,113 |  |  | $ | 6,459 |
Foreign | (3,391) |  |  | 2,287 |  |  | (2,560) |  |  | 320 |
Total income (loss) before income taxes | $ | 2,555 |  |  | $ | (1,927) |  |  | $ | 7,553 |  |  | $ | 6,779 |
Income tax benefit (expense) | $ | 2,098 |  |  | $ | (2,920) |  |  | $ | 16 |  |  | $ | (6,814) |
Effective tax rate | (82) | % |  | (152) | % |  | — | % |  | 101 | %

The Company’s income tax expense represents the estimated annual effective tax rate applied to the year-to-date operating re sults, adjusted for certain discrete tax items.
The Company’s effective tax rate for the three and six months ended June 30, 2026 was primarily impacted by the reversal of its U.K. operating subsidiary’s valuation allowance, partially offset by costs related to non-deductible stock-based compensation and non-deductible executive compensation.
The Company’s effective tax rate for the three and six months ended June 30, 2025 was primarily impacted by costs related to non-deductible stock-based compensation, non-deductible executive compensation and a non-U.S. valuation allowance.
During the second quarter of 2026, the Company recorded a discrete benefit of $6.4 million resulting from a change in judgment regarding future-year realizability of deferred tax assets in its U.K. operations, primarily related to fixed asset temporary differences. The reduction reflects management’s conclusion, based on all available positive and negative evidence, that realization of the U.K. deferred tax assets is more likely than not. As a result, the discrete benefit significantly reduced the Company’s effective tax rate for the three and six months ending June 30, 2026.
In June 2026, the Company entered into the Purchase Agreement with Zimmer to divest the Company’s iovera° business. The Transaction closed on July 31, 2026. The parties agreed to treat the transaction as a deemed asset sale for U.S. federal income tax purposes through an election under Section 338(h)(10) of the Internal Revenue Code. As the Transaction closed subsequent to June 30, 2026, the income tax effects of the transaction, including changes in the valuation allowance for capital-loss carryforwards, were not recognized in the income tax provisions for the three and six months ending June 30, 2026. For more information on the divestiture of iovera°, see Note 3, Assets and Liabilities Held for Sale.
As of both June 30, 2026 and December 31, 2025, the Company had an income taxes payable balance of $6.1 million that was included in other liabilities within the condensed consolidated balance sheet, related to unrecognized tax benefits. As of both June 30, 2026 and December 31, 2025, the Company had less than $0.1 million of current income taxes payable that was included in accrued expenses within the condensed consolidated balance sheet.
As of June 30, 2026 and December 31, 2025, the Company had income taxes receivable and prepaid income taxes of $8.4 million and $8.2 million, respectively, which were included in prepaid expenses and other current assets within the condensed consolidated balance sheet. The balances include a $4.6 million tax refund claim for estimated federal taxes made prior to the July 2025 enactment of federal legislation known as the One Big Beautiful Bill Act (the “OBBBA”).
U.S. Tax Reform
The OBBBA resulted in changes to U.S. federal income tax law. Significant provisions of the OBBBA include the permanent extension of certain provisions of the 2017 Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. In accordance with ASC 740, Income Taxes, the Company was required to recognize the effect of the tax law changes in the period of enactment, such as remeasuring its estimated U.S. deferred tax assets and liabilities. The Company had $124.6 million of a gross deferred tax asset attributed to unamortized U.S. capitalized research and development costs as of December 31, 2024, of which $62.3 million will be deductible on both its 2025 and 2026 income tax returns. There are no other material impacts to the Company related to the enactment of the OBBBA.
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NOTE 16—OTHER OPERATING EXPENSES, NET
Other operating expenses, net for the six months ended June 30, 2026 and 2025 are summarized below (in thousands):

| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2026 |  | 2025 |  | 2026 |  | 2025
Divestiture-related expenses | $ | 5,931 |  |  | $ | — |  |  | $ | 5,931 |  |  | $ | — |
Contingent consideration charges (gains) | 1,663 |  |  | (357) |  |  | (614) |  |  | (3,032) |
Acquisition-related expenses | — |  |  | 991 |  |  | — |  |  | 2,502 |
Legal settlement | — |  |  | — |  |  | — |  |  | 7,000 |
Total other operating expenses, net | $ | 7,594 |  |  | $ | 634 |  |  | $ | 5,317 |  |  | $ | 6,470 |

Divestiture-Related Expenses
The Company recognized divestiture-related expenses of $5.9 million during the three and six months ended June 30, 2026, primarily related to third-party services and legal fees associated with divesting iovera° to Zimmer. For more information, see Note 3, Assets and Liabilities Held for Sale.
Flexion Acquisition Contingent Consideration
The Company recognized contingent consideration charges of $1.7 million and gains of $0.6 million during the three and six months ended June 30, 2026, respectively. The Company recognized contingent consideration gains of $0.4 million and $3.0 million during the three and six months ended June 30, 2025, respectively. See Note 11, Financial Instruments, for information regarding the method and key assumptions used in the fair value measurements of contingent consideration and more information regarding the changes in fair value.
Acquisition-Related Expenses
The Company recognized acquisition-related expenses of $1.0 million and $2.5 million during the three and six months ended June 30, 2025, respectively, primarily related to third-party services and legal fees associated with the GQ Bio Acquisition.
Legal Settlement
The Company recognized $7.0 million of costs during the six months ended June 30, 2025 related to the patent infringement suits against the eVenus ANDA Filers (as defined below). For more information, see Note 17, Commitments and Contingencies.
NOTE 17—COMMITMENTS AND CONTINGENCIES
Legal Proceedings
From time to time, the Company has been and may again become involved in legal proceedings arising in the ordinary course of its business, including those related to its patents and intellectual property, product liability and government investigations. Except as described below, the Company is not presently a party to any legal proceedings that it believes to be material, and is not aware of any pending or threatened litigation against the Company which it believes could have a material adverse effect on its business, operating results, financial condition or cash flows. The Company is not in a position to assess the likelihood of any potential losses or adverse effect on its financial condition or to estimate the amount or range of potential losses, if any, from the following actions at this time.
MyoScience Milestone Litigation
In August 2020, the Company and its subsidiary, Pacira CryoTech, Inc. (“Pacira CryoTech”), filed a lawsuit in the Court of Chancery of the State of Delaware against Fortis Advisors LLC (“Fortis”), solely in its capacity as representative for the former securityholders of MyoScience and certain other defendants, seeking declaratory judgment with respect to certain terms of the merger agreement for the MyoScience Acquisition (the “MyoScience Merger Agreement”), specifically related to the achievement of certain milestone payments under the MyoScience Merger Agreement. In October 2020, Fortis filed an answer and counterclaim against the Company and Pacira CryoTech seeking to recover certain milestone payments under the MyoScience Merger Agreement.
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A trial was conducted in September 2023. In January 2025, the Court issued its decision, finding that the disputed milestones were not met and therefore granted judgment to the Company in full. In March 2025, the Company filed a motion to recover attorney fees, and the parties subsequently agreed to settle the amount of expenses owed to the Company, whereby Fortis agreed to pay the Company $5.2 million and waived its rights to appeal the decision. A final judgment and order was entered in April 2025. The $5.2 million payment received was accounted for as a recovery of losses and recorded against selling, general and administrative expense in the six months ended June 30, 2025 within the condensed consolidated statement of operations, consistent with where the previous expenses were recorded.
eVenus Pharmaceutical Laboratories Litigations
In October 2021, December 2021, April 2023 and May 2024, the Company received Notice Letters advising that eVenus Pharmaceutical Laboratories, Inc., or eVenus, of Princeton, New Jersey, submitted to the FDA an Abbreviated New Drug Application, or ANDA, with a Paragraph IV certification seeking authorization for the manufacturing and marketing of a generic bupivacaine liposome injectable suspension in the U.S. prior to the expiration of certain of the Company’s U.S. patents.
Beginning in November 2021, the Company filed various patent infringement suits against eVenus, its parent company (Jiangsu Hengrui Pharmaceuticals, Co. Ltd., or Jiangsu Hengrui) and Fresenius Kabi USA, LLC, or Fresenius, (together, the “eVenus ANDA Filers”) in the U.S. District Court for the District of New Jersey asserting infringement of U.S. Patent No. 11,033,495 (the ‘495 patent) (21-cv-19829), U.S. Patent No. 11,179,336 (the ‘336 patent) (22-cv-00718), U.S. Patent No. 11,426,348 (the ‘348 patent) (23-cv-02367), U.S. Patent Nos. 11,819,574 (the ‘574 patent) and 11,819,575 (the ‘575 patent) (24-cv-06294), and U.S. Patent No. 11,925,706 (the ‘706 patent) (24-cv-07680). In December 2024, the Company filed a patent infringement suit against Fresenius and Jiangsu Hengrui in the Northern District of Illinois (24-cv-12416) asserting that the ANDA products will infringe U.S. Patent No. 12,156,940 (the ‘940 patent). Also in December 2024, the eVenus ANDA Filers filed an action for declaratory judgment of non-infringement and invalidity with respect to the ‘940 patent in the District Court of New Jersey (24-cv-11014).
On April 7, 2025, the Company, along with its operating subsidiary, Pacira Pharmaceuticals, Inc., entered into a settlement agreement with the eVenus ANDA Filers with respect to the litigations noted above. Pursuant to the settlement agreement, the eVenus ANDA Filers will be enjoined from marketing a generic bupivacaine liposome injectable suspension before the expiration of the patents-in-suit, except as provided for in the settlement agreement, as described below. In settlement of all outstanding claims in the litigations, the Company agreed to provide the eVenus ANDA Filers with a license to the Company’s patents required to manufacture and sell certain volume-limited amounts of a generic bupivacaine liposome injectable suspension in the U.S. beginning on a confidential date that is sometime in early 2030. While the agreed-upon volume-limited percentages are confidential, they begin at a high single-digit percentage of the total volumes distributed in the U.S. market and increase gradually in each 12-month period following the volume-limited entry date until reaching a percentage in the low thirties in 2033 and increasing modestly in each of the next two 12-month periods before reaching a maximum percentage in the high thirties of the total volumes distributed in the U.S. for the final three years of the agreement. In addition, the Company has agreed to provide the eVenus ANDA Filers with a license to its patents required to manufacture and sell an unlimited quantity of a generic bupivacaine liposome injectable suspension in the U.S. beginning on a confidential date in 2039. In addition, in recognition of the Company’s expected savings with respect to, among other things, the avoidance of fees, costs, time and resources associated with continuing the litigations, the Company paid the eVenus ANDA Filers $7.0 million. This legal settlement cost was recorded within other operating expenses, net in the six months ended June 30, 2025 in the Company’s condensed consolidated statement of operations.
The WhiteOak Group and Qilu Pharmaceutical Litigations
In October 2025, the Company received two separate Paragraph IV Certifications from two Chinese generic drug manufacturers (The WhiteOak Group, Inc., or WhiteOak, of Rockville, Maryland (a subsidiary of Zhejiang Haichang Biotechnology Co., Ltd.) and Qilu Pharmaceutical (Hainan) Co., Ltd., or Qilu), each advising that they had submitted an ANDA to the FDA seeking authorization from the FDA to manufacture, use or sell a generic version of EXPAREL in the U.S. Each letter alleged that EXPAREL patents listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (the “Orange Book”) are not valid, not enforceable, and/or will not be infringed by the commercial manufacture, use or sale of the proposed products described in these ANDA submissions.
On November, 26, 2025, the Company filed a patent infringement suit against WhiteOak and Qilu in the U.S. District Court of the District of Delaware (25-cv-1445) asserting infringement of U.S. Patent No. 11,033,495 (the ‘495 patent), U.S. Patent Nos. 11,819,574 (the ‘574 patent) U.S. Patent No. 12,144,890 (the ‘890 patent), U.S. Patent No. 12,151,024 (the ‘024 Patent), U.S. Patent No. 12,156,940 (the ‘940 patent), U.S. Patent No. 12,251,468 (the ‘468 Patent), U.S. Patent No. 12,296,047 (the ’047 Patent), U.S. Patent No. 12,318,483 (the ‘483 Patent), and U.S. Patent No. 12,370,142 (the ‘142 Patent). On January 23, 2026 and February 5, 2026, Qilu and WhiteOak, respectively, each answered the complaint and asserted affirmative
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defenses and counterclaims asserting, inter alia, invalidity, unenforceability and non-infringement. On June 24, 2026, WhiteOak amended their answer to assert counterclaims for inequitable conduct. The Company intends to vigorously defend its intellectual property rights relating to EXPAREL. The Company is unable to predict the outcome of this litigation at this time.
Securities Class Action
On January 13, 2025, Leandro Alvarez filed a putative class action on behalf of Company shareholders between August 2, 2023 and August 8, 2024 against the Company and certain of its officers, in the District Court of New Jersey (25-cv-322). The complaint alleged that the Company made materially false and misleading statements and/or concealed material adverse facts concerning EXPAREL patents. The Company filed a motion to dismiss the complaint, and in February 2026, the suit was dismissed with prejudice. An appeal was filed in March 2026 which was voluntarily dismissed with prejudice in May 2026.
Shareholder Derivative Action
On June 16, 2025, a Shareholder Derivative suit, Young v. Lee, et al, was filed in the District of New Jersey (25-cv-11841). The complaint alleges that certain of the Company’s officers and members of the Company’s board of directors breached their fiduciary duties by making materially false and misleading statements and/or concealed material adverse facts concerning EXPAREL patents. The suit was voluntarily dismissed without prejudice in May 2026.
Research Development Foundation
Pursuant to an agreement with the Research Development Foundation, or RDF, the Company was required to pay RDF a low single-digit royalty on the collection of revenues from certain products for as long as certain patents assigned to the Company under the agreement remain valid. RDF has the right to terminate the agreement for an uncured material breach by the Company, in connection with its bankruptcy or insolvency or if it directly or indirectly opposes or disputes the validity of the assigned patent rights. The Company’s ‘495 patent was issued on June 15, 2021. Thereafter, RDF asserted that the issuance of that patent extends the Company’s royalty obligations under the agreement until 2041. The Company believes that the royalty period under the agreement ended on December 24, 2021 with the expiration of U.S. Patent No. 9,585,838. Because of the disagreement over the interpretation of the agreement, in December 2021, the Company filed a declaratory judgment lawsuit in the U.S. District Court for the District of Nevada (21-cv-02241). The lawsuit sought a declaration from the court that the Company owed no royalties to RDF with respect to its EXPAREL product after December 24, 2021.
In August 2023, the U.S. District Court, District of Nevada granted the Company’s motion for partial summary judgment in respect to the Company’s claim for a declaration that it no longer owes royalties for EXPAREL made under its 45-liter batch manufacturing process as of December 24, 2021. A trial as to whether royalties were owed on EXPAREL made under the Company’s enhanced, larger-scale manufacturing process was conducted in September 2024. In April 2025, the Court issued judgment in favor of the Company. As a result, the low single-digit royalty that the Company had been paying RDF is eliminated, and the Company sought repayment of up to $23.1 million, plus interest, from RDF, representing the royalties that the Company paid to RDF under protest on the collection of revenues of EXPAREL that occurred after December 24, 2021.
In June 2025, the U.S. District Court for the District of Nevada issued judgment in favor of the Company declaring that RDF is required to repay Pacira $23.1 million in royalties on EXPAREL sales that were previously paid under protest. The Nevada Court also awarded Pacira an additional interest payment of $5.2 million in statutory interest on the royalties paid under protest. In July 2025, the Company received a $28.3 million cash payment for which $23.1 million was recorded within other operating expenses, net and $5.2 million was recorded within interest income in the three months ended September 30, 2025 in the Company’s condensed consolidated statements of operations. In May and September 2025, RDF filed two notices of appeal. A consolidated appeal is pending.
Other Commitments, Contingencies and Commercial Partners
LG Chem
In January 2026, the Company and LG Chem, Ltd., or LG Chem, entered into a partnership agreement to expand access to EXPAREL in select Asia–Pacific markets. Under the terms of the partnership, LG Chem has the exclusive rights to commercialize EXPAREL in the region. The Company received a $2.0 million upfront payment that it will recognize over the license term upon commercialization and will receive a contractually stated price and tiered royalties on future commercial sales by LG Chem in its licensed territories. The Company will manufacture EXPAREL and LG Chem will be responsible for securing regulatory approvals in the licensed territories. LG Chem has filed for marketing authorization in South Korea and plans to do so in Thailand in the second half of 2026.
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Johnson & Johnson MedTech
In July 2025, the Company entered into a co-promotion agreement, with Johnson & Johnson MedTech, or J&J MedTech, (the “J&J Agreement”), to market and promote the use of ZILRETTA for OA knee pain in the U.S. J&J MedTech’s specialized early intervention sales force will extend the reach of ZILRETTA beyond orthopedic practices, into multiple new physician specialties, including sports medicine, osteopathy, pain management and rheumatology.
Under the J&J Agreement, J&J MedTech is the exclusive third-party co-promoter for ZILRETTA in the U.S. The initial term of the J&J Agreement extends through 2031 with an option to extend under mutual agreement.
The Company will continue to recognize all revenue from sales of ZILRETTA. As compensation for its promotional efforts, for the first 12 months of the J&J Agreement the Company will pay J&J MedTech a minimum monthly commission. For the remaining term of the agreement, Pacira will pay a tier-based commission with higher commission percentages earned at higher annual ZILRETTA sales levels. J&J MedTech will receive a tiered commission ranging from low single digits to double digits.
The Company and J&J MedTech have mutual termination rights under the J&J Agreement, subject to certain terms, conditions and advance notice requirements, provided that the Company or J&J MedTech generally may not terminate the J&J Agreement, without cause, within one year of the effective date of the J&J Agreement. The Company also has additional unilateral termination rights under certain circumstances. The J&J Agreement contains customary representations, warranties, covenants and confidentiality provisions, as well as mutual indemnification obligations. J&J MedTech is also subject to certain obligations and restrictions, including required compliance with certain laws and regulations and the Company’s policies, in connection with fulfilling their obligations under the J&J Agreement.
Pediatric Trial Commitments
The FDA, as a condition of EXPAREL approval, has required the Company to study EXPAREL for infiltration and as a brachial plexus block in pediatric patients. The Company was granted deferrals for the required pediatric trials until after the indications were approved in adults. Similarly, in Europe, the Company agreed with the European Medicines Agency, or EMA, on a Pediatric Investigation Plan as a prerequisite for submitting a Marketing Authorization Application (MAA) in the European Union, or E.U. Despite the U.K.’s withdrawal from the E.U., the agreed pediatric plan is applicable in the U.K.
The Company has received notification from both the FDA and EMA that its pediatric studies requirement had been waived for the indications of brachial plexus interscalene nerve block, lower extremity nerve block, sciatic nerve block in the popliteal fossa and adductor canal block indications to produce postsurgical regional analgesia in pediatric patients. The Company is still working with the FDA, EMA and Medicines and Healthcare products Regulatory Agency (MHRA) to finalize the regulatory pathways for its remaining pediatric commitments.
The Company has successfully completed Part 1 of a Phase 1 pharmacokinetic pediatric study in children aged two to less than six years of age and has completed enrollment for Part 2 of the study in children aged six months to less than two years of age using the same dosage that was utilized in Part 1.
Contingent Milestone Payments
Refer to Note 11, Financial Instruments, for information on potential contingent milestone payments related to the Flexion Acquisition.
PCRX-201
PCRX-201 (enekinragene inzadenovec) is a novel, locally administered gene therapy product candidate that boosts cellular production of the anti-inflammatory protein interleukin-1 receptor antagonist (IL-1Ra) for treating OA pain in the knee. PCRX-201 was added to the Company’s portfolio as part of the Flexion Acquisition in November 2021. In February 2024, the FDA granted a Regenerative Medicine Advanced Therapy designation to PCRX-201.
Prior to the Flexion Acquisition, in 2017, Flexion entered into an agreement with GQ Bio to acquire the global rights to PCRX-201, a gene therapy product candidate. As part of the agreement, up to an aggregate of $56.0 million of payments could have become due upon the achievement of certain development and regulatory milestones, including up to $4.5 million through initiation of a Phase 2 clinical trial and up to an additional $51.5 million in development and global regulatory approval milestone payments. In February 2025, Pacira Therapeutics, Inc., a wholly-owned subsidiary of the Company, completed the GQ Bio Acquisition and acquired the remaining 81% of GQ Bio that was not already owned by the Company. As of the date hereof, GQ Bio is a wholly-owned subsidiary of the Company.
Also in 2017, in an agreement between The Baylor College of Medicine, or BCM, and GQ Bio, the Company (through the
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Flexion Acquisition) became the direct licensee of certain underlying BCM patents and other proprietary rights related to PCRX-201. The license agreement grants the Company an exclusive, royalty-bearing, world-wide right and license under its patent and other proprietary rights directly related to PCRX-201. The license agreement with BCM includes a low single-digit royalty on net product sales of PCRX-201. Milestone payments range from $0.1 million up to $0.6 million based on the completion of a Phase 1 FDA trial up to a Phase 3 clinical trial.
NOTE 18—SEGMENT INFORMATION
The Company is managed and operated as a single business focused on the development, manufacture, marketing, distribution and sale of non-opioid pain therapies. The Company is managed by a single management team, and consistent with its organizational structure, the Chief Executive Officer—who is the Company’s chief operating decision maker, or CODM—manages and allocates resources at a consolidated level. Accordingly, the Company views its business as one operating segment and one reportable segment to evaluate its performance, allocate resources, set operational targets and forecast its future financial results.
The key measure of the Company is GAAP net income. The CODM uses this measure to evaluate its performance, allocate resources, set operational targets and forecast its future financial results.
There are significant expense categories and amounts that are regularly provided to the CODM. These expense categories differ from what is disclosed in the Company’s financial results. The table below reconciles the significant expense categories provided to the CODM to the Company’s expenses as disclosed under GAAP (in thousands):

| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2026 |  | 2025 |  | 2026 |  | 2025
Revenues | $ | 192,399 |  |  | $ | 181,099 |  |  | $ | 369,775 |  |  | $ | 350,022 |
Less: |  |  |  |  |  |  |
Adjusted cost of goods sold (1) | 42,355 |  |  | 32,663 |  |  | 77,125 |  |  | 65,253 |
Adjusted research and development (1) | 27,053 |  |  | 24,686 |  |  | 52,415 |  |  | 47,787 |
Adjusted selling and marketing (1) | 52,117 |  |  | 50,964 |  |  | 110,283 |  |  | 106,535 |
Adjusted general and administrative (1) | 29,148 |  |  | 26,231 |  |  | 54,860 |  |  | 46,840 |
Stock-based compensation (1) | 14,958 |  |  | 15,472 |  |  | 28,497 |  |  | 30,025 |
Amortization of acquired intangible assets | 14,322 |  |  | 14,322 |  |  | 28,644 |  |  | 28,644 |
Divestiture and acquisition-related expenses (2) | 6,516 |  |  | 2,098 |  |  | 7,396 |  |  | 3,960 |
Changes in the fair value of contingent consideration | 1,663 |  |  | (357) |  |  | (614) |  |  | (3,032) |
Legal settlement | — |  |  | — |  |  | — |  |  | 7,000 |
Decommissioning of manufacturing suite | — |  |  | 6,521 |  |  | — |  |  | 6,521 |
Total operating expenses | 188,132 |  |  | 172,600 |  |  | 358,606 |  |  | 339,533 |
Total other expense, net | (1,712) |  |  | (10,426) |  |  | (3,616) |  |  | (3,710) |
Income (loss) before income taxes | 2,555 |  |  | (1,927) |  |  | 7,553 |  |  | 6,779 |
Income tax benefit (expense) | 2,098 |  |  | (2,920) |  |  | 16 |  |  | (6,814) |
Net income (loss) | $ | 4,653 |  |  | $ | (4,847) |  |  | $ | 7,569 |  |  | $ | (35) |

(1) The adjustments are primarily related to stock-based compensation being noted separately as a line item.
(2) During the three and six months ended June 30, 2026, the Company recognized $5.9 million of divestiture-related expenses, primarily related to third-party services and legal fees, which were recorded to other operating expenses, net in the condensed consolidated statement of operations.
In February 2025, the Company acquired the remaining 81% of GQ Bio that it did not already own. During the three and six months ended June 30, 2025, the Company incurred acquisition-related expenses of $1.0 million and $2.5 million, respectively, mainly related to third-party services and legal fees associated with the acquisition of GQ Bio, which were recorded to other operating expenses, net in the condensed consolidated statement of operations. As part of the purchase agreement, $7.8 million of expense will be recognized and paid over three years pursuant to a key employee holdback agreement in increments of 50%, 30% and 20%, respectively. This resulted in $0.6 million and $1.5 million recognized within research and development in the condensed consolidated statement of operations for the three and six months ended June 30, 2026, respectively, and $1.1 million and $1.5 million for the three and six months ended June 30, 2025, respectively.
The measure of segment assets is reported on the Company’s consolidated balance sheet as total assets. Substantially all of the Company’s assets are used to support its mission in delivering innovative, non-opioid pain therapies to transform the lives of patients. As of June 30, 2026 and December 31, 2025, the Company’s long-lived assets were primarily located in the U.S. (81% and 83%, respectively), and, to a lesser extent, Germany (10% and 9%) and the U.K. (9% and 8%). For information on the Company’s fixed assets, refer to Note 6, Fixed Assets.
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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP) and in accordance with the rules and regulations of the United States Securities and Exchange Commission, or SEC.
This Quarterly Report on Form 10-Q and certain other communications made by us contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995, including, without limitation, statements related to: the ability to realize the anticipated benefits of the divestiture of iovera®°; the ability of Zimmer, Inc., or Zimmer (a subsidiary of Zimmer Biomet Holdings, Inc.), to unlock the full potential of iovera°; '5x30', our growth and business strategy, our future outlook, the strength and efficacy of our intellectual property protection and patent terms, our future growth potential and future financial and operating results and trends, our plans, objectives, expectations (financial or otherwise) and intentions, including our plans with respect to the repayment of our indebtedness, anticipated product portfolio and product development programs, strategic alliances, plans with respect to the Non-Opioids Prevent Addiction in the Nation (“NOPAIN”) Act and any other statements that are not historical facts. For this purpose, any statement that is not a statement of historical fact should be considered a forward-looking statement. We often use the words “anticipate,” “believe,” “can,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “should,” “will,” “would” and similar expressions to help identify forward-looking statements. We cannot assure you that our estimates, assumptions and expectations will prove to have been correct. Actual results may differ materially from these indicated by such forward-looking statements as a result of various important factors, including risks relating to, among others: risks associated with acquisitions, such as the risk that the acquired businesses and/or assets will not be integrated successfully, that such integration may be more difficult, time-consuming or costly than expected or that the expected benefits of the transaction will not occur; risks associated with divestitures; our manufacturing and supply chain, global and United States, or U.S., economic conditions (including tariffs, inflation and rising interest rates), and our business, including our revenues, financial condition, cash flows and results of operations; the success of our sales and manufacturing efforts in support of the commercialization of EXPAREL® (bupivacaine liposome injectable suspension) and ZILRETTA® (triamcinolone acetonide extended-release injectable suspension); the rate and degree of market acceptance of EXPAREL and ZILRETTA; the size and growth of the potential markets for EXPAREL and ZILRETTA and our ability to serve those markets; our plans to expand the use of EXPAREL and ZILRETTA to additional indications and opportunities, and the timing and success of any related clinical trials for EXPAREL, ZILRETTA, and any of our other product candidates, including, but not limited to, PCRX-201 (enekinragene inzadenovec) and PCRX-2002; the commercial success of EXPAREL and ZILRETTA; the related timing and success of U.S. Food and Drug Administration, or FDA, supplemental New Drug Applications, or sNDAs, and premarket notification 510(k)s; the related timing and success of European Medicines Agency, or EMA, Marketing Authorization Applications, or MAAs; our plans to evaluate, develop and pursue additional product candidates utilizing our proprietary high-capacity adenovirus (“HCAd”) vector platform; the approval of the commercialization of our products in other jurisdictions (by either us or our partners); clinical trials in support of an existing or potential HCAd-based product candidate; our commercialization and marketing capabilities; our ability to successfully complete capital projects; the outcome of any litigation; the recoverability of our deferred tax assets; assumptions associated with contingent consideration payments; assumptions used for estimated future cash flows associated with determining the fair value of the Company; and the anticipated funding or benefits of our share repurchase program.
The forward-looking statements included in this Quarterly Report on Form 10-Q represent our views as of the filing date of this Quarterly Report on Form 10-Q. Important factors could cause our actual results to differ materially from those indicated or implied by forward-looking statements, and as such we anticipate that subsequent events and developments will cause our views to change. Except as required by applicable law, we undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, and readers should not rely on the forward-looking statements as representing our views as of any date subsequent to the date of the filing of this Quarterly Report on Form 10-Q.
These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these statements. These factors include items mentioned herein and the matters discussed and referenced in Part I-Item 1A. “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Annual Report”); in Part II. Item 1A in this Quarterly Report on Form 10-Q; and in other reports filed with the SEC.
Unless the context requires otherwise, references to “Pacira,” the “Company,” the “Registrant,” “our,” “us” and “we” in this Quarterly Report on Form 10-Q refer to Pacira BioSciences, Inc. and its subsidiaries.
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Overview
Pacira’s mission is to deliver innovative, non-opioid pain therapies to transform the lives of patients. We are focused in two therapeutic areas as defined by the indications within our approved commercial portfolio and the indications we are pursuing within our clinical development pipeline. One area is postsurgical pain control and the second is early intervention osteoarthritis, or OA, pain management. EXPAREL is our long-acting, non-opioid analgesic for postsurgical pain control. EXPAREL utilizes our unique pMVL drug delivery technology that encapsulates drugs without altering their molecular structure and releases them over a desired period of time. In the U.S., EXPAREL is the only product indicated for local analgesia via infiltration in patients aged six years and older and regional analgesia via interscalene brachial plexus nerve block, sciatic nerve block in the popliteal fossa and adductor canal block in adults. In Europe, EXPAREL is approved as a brachial plexus block or femoral nerve block for treatment of post-operative pain in adults, and as a field block for treatment of somatic post-operative pain from small- to medium-sized surgical wounds in adults and children aged six years and older. We drop-ship EXPAREL directly to end-users based on orders placed to wholesalers or directly to us. ZILRETTA is our extended-release corticosteroid approved to manage OA knee pain. With a single injection, ZILRETTA can significantly reduce knee pain for three months of relief. ZILRETTA is a potential alternative to hyaluronic acid, or HA, platelet rich plasma injections or other early intervention treatments. EXPAREL and ZILRETTA are highly complementary products as long-acting, non-opioid therapies that alleviate pain. We are also advancing two Phase 2 clinical programs—PCRX-201 (enekinragene inzadenovec), a novel, locally administered gene therapy for the treatment of OA of the knee, and PCRX-2002, a complementary, long-acting formulation of the non-opioid analgesic ropivacaine for postsurgical pain control. PCRX-201 is the lead program from our proprietary high-capacity adenovirus, or HCAd, vector platform, which enables local administration of genetic medicines and has the potential to unlock gene therapy for large prevalent diseases affecting millions of people.
We expect to continue to invest in commercial resources to expand the utilization of EXPAREL and ZILRETTA; advance regulatory activities for EXPAREL and ZILRETTA, and progress our clinical-stage product candidates—including PCRX-201 and PCRX-2002; expand and enhance our commercial manufacturing efficiencies; invest in new products, businesses and technologies through business development; and support legal matters.
In July 2026, we completed the divestiture of iovera°, a handheld cryoanalgesia device that delivers immediate, long-acting, drug-free pain control using precise, controlled doses of cold temperature to a targeted nerve, to Zimmer, Inc., a subsidiary of Zimmer Biomet Holdings, Inc. (“Zimmer”). For more information, see Note 3, Assets and Liabilities Held for Sale, to our condensed consolidated financial statements included herein.
Global Economic Conditions, Inflation and Tariffs
Direct and indirect effects of global economic conditions have in the past, and may continue to, negatively impact our business, financial condition and results of operations. Such impacts may include the effect of prolonged periods of inflation, the imposition of tariffs or increases in the prices of commodities, such as fuel, which could, among other things, result in higher costs for raw materials, equipment and other goods and services; cause patients to defer or cancel medical procedures, thereby adversely impacting our revenues; and negatively impact our suppliers, which could result in negative impacts on gross margins, longer lead-times or the inability to procure a sufficient supply of materials.
While we have not experienced a material impact from tariffs to date, the current macroeconomic environment remains dynamic and subject to rapid and potentially material change. Our business may be adversely impacted by ongoing risks associated with global macroeconomic conditions, including international relations and trade disputes. In particular, EXPAREL and ZILRETTA are manufactured into finished dosage by a contract development and manufacturing organization in the United Kingdom, or U.K., and the active pharmaceutical ingredients, or API, for both products are sourced primarily from the European Union, or E.U., or Switzerland. On April 2, 2026, the President of the U.S. issued a proclamation under Section 232 of the Trade Expansion Act of 1962, imposing tariffs on certain pharmaceutical products imported to the U.S. This order (the “Presidential Order”) applies to patented pharmaceutical products, associated APIs and other products classified under Harmonized Tariff Schedule (HTS) U.S. codes listed in Annex I. The Presidential Order imposes country-specific tariffs, including 15% tariffs on certain products imported from the E.U., Japan, South Korea, Switzerland and Liechtenstein; and a 10% tariff on products imported from the U.K. with a potential reduction to 0%, subject to a future U.S. and U.K. pharmaceutical pricing agreement. Patented pharmaceutical products imported from certain other countries may be subject to tariffs of up to 100%. As a result, we expect tariffs will impact our products and/or their ingredients imported into the U.S. However, tariff rates can change quickly and unexpectedly. We will continue to monitor developments and assess any potential impacts and related trade measures on our business and supply chain.
Such tariffs imposed by the U.S. and/or other countries that are currently in effect, or may take effect in the future, could increase our manufacturing and operating expenses in future periods, including the cost to deliver our products to commercial markets, the cost to source raw materials for the manufacturing of our products and the cost of materials used in our research
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and development activities. The previous imposition of tariffs and future tariffs impacting our industry, the magnitude of response by other countries to such tariffs and the length of time such tariffs are in effect may also increase uncertainty and adversely impact our business.
We currently expect that tariffs will have a negative impact on gross margins. We are currently evaluating the magnitude of this impact but are unable to quantify the expected impact with specificity at this time due to the rapidly changing political policy environment. There has been significant volatility in U.S. tariff and customs policy recently, with frequent changes in rates, sudden elimination or reinstatement of exemptions, shifts in implementation dates and reversals of prior actions. This volatility makes it more difficult to forecast costs, plan our global supply chain and provide reliable financial guidance. Policy changes often require rapid operational adjustments that can increase costs and reduce efficiency. We expect such volatility and uncertainty related to tariffs and customs to continue, potentially posing ongoing challenges to our operations, financial planning and investor communications.
Recent Highlights
•In June 2026, we entered into a Stock and Asset Purchase Agreement with Zimmer to divest iovera° for up to $140.0 million, including an upfront payment of $70.0 million and potential contingent consideration of up to an additional $70.0 million in the aggregate, payable upon the achievement of revenue-based milestones up to and through the period ending December 31, 2031 (the “Transaction”). The Transaction closed on July 31, 2026, in which we received cash of $73.6 million, after customary purchase price adjustments. Going forward, we will collaborate with Zimmer on advancing the iovera° spasticity program with an opportunity for us to receive incremental compensation assuming successful completion of a registrational study and subsequent regulatory approval. We also entered into a customary transition services agreement with Zimmer in connection with the closing.
We believe this transaction advances our transition into an innovative biopharmaceutical company and aligns with our 5x30 strategy and that Zimmer’s global scale, established expertise commercializing medical devices and commitment to significantly expanding access can unlock the full potential of iovera° to benefit more patients and providers globally.
For more information, see Note 3, Assets and Liabilities Held for Sale, to our condensed consolidated financial statements included herein.
•In June 2026, Thomas Wiggans was elected by stockholders to our board of directors. Mr. Wiggans brings with him more than 40 years of leadership experience across commercial operations, corporate strategy and executive management within the global life sciences industry, as well as significant experience leading biopharmaceutical companies through successful acquisitions. Mr. Wiggans has served as chief executive officer of four biopharmaceutical companies with successful exits through acquisition or strategic transactions, and most notably co-founded Dermira, Inc. in 2010 and was its chief executive officer and chairman until its acquisition by Eli Lilly in 2020. Mr. Wiggans was concurrently appointed to the People and Compensation Committee and Nominating, Governance and Sustainability Committee of our board of directors.
•In July 2026, we announced that UnitedHealthcare—the largest health insurer in the U.S. with approximately 40 million covered lives—now provides separate reimbursement for EXPAREL across outpatient settings, including hospital outpatient departments and ambulatory surgery centers. This update enables EXPAREL to be reimbursed outside of the surgical bundle for eligible UnitedHealthcare members, representing an additional step in expanding access to non-opioid postsurgical pain management options. With this addition, UnitedHealthcare joins a growing list of national payers, including Aetna, Cigna, TRICARE and Humana, as well as numerous regional plans that provide separate reimbursement for EXPAREL. In total, approximately 150 million covered lives in the U.S. now have access to separate reimbursement for EXPAREL, representing roughly half of all medically insured lives nationwide. This ensures patients have greater access to safe, effective pain management options during and after surgery without the burden of financial barriers.
•In July 2026, we announced that we have successfully transitioned PCRX-201 (enekinragene inzadenovec), our investigational locally administered gene therapy for OA of the knee, to a U.S.-based scalable commercial manufacturing process intended to support future registrational development and commercialization. With drug product from the new manufacturing process now available, we are currently screening subjects for Part B of our Phase 2 ASCEND study. Enrollment in Part A of ASCEND concluded in June 2026, with topline data expected by the end of this year.
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EXPAREL
In the U.S., EXPAREL is currently indicated for local analgesia via infiltration in patients aged six years and older and regional analgesia via interscalene brachial plexus nerve block, sciatic nerve block in the popliteal fossa, and adductor canal block in adults. Safety and efficacy have not been established in other nerve blocks. In Europe, EXPAREL is approved as a brachial plexus block or femoral nerve block for treatment of post-operative pain in adults, and as a field block for treatment of somatic post-operative pain from small- to medium-sized surgical wounds in adults and children aged six years and older. We are currently advancing a registration program for EXPAREL in pediatric patients under six years of age.
EXPAREL Clinical Benefits
We believe EXPAREL can replace the use of bupivacaine delivered via elastomeric pumps as the foundation of a multimodal regimen for long-acting postsurgical pain management. Based on our clinical data, EXPAREL:
•provides long-lasting local or regional analgesia;
•is a ready-to-use formulation;
•expands easily with saline or lactated Ringer’s solution to reach a desired volume;
•can be administered for local analgesia via infiltration and for regional analgesia via field block, as well as brachial plexus nerve block, sciatic nerve block in the popliteal fossa and adductor canal block; and
•facilitates treatment across a variety of surgical sites.
We believe EXPAREL is a key component of long-acting postsurgical pain management regimens that reduce the need for opioids. Based on the clinical data from our Phase 3 and Phase 4 clinical studies as well as data from retrospective health outcomes studies, EXPAREL significantly reduces opioid usage while improving postsurgical pain management.
We have successfully completed Part 1 of a pediatric study in children aged two to less than six years of age. We have completed enrollment for Part 2 of the pediatric study in children aged six months to less than two years of age using the same dosage that was utilized in Part 1.
ZILRETTA
ZILRETTA is the first and only extended-release, single-shot corticosteroid IA injection therapy for OA knee pain. ZILRETTA employs a proprietary, extended-release microsphere technology combining triamcinolone acetonide, or TA, a commonly administered, immediate-release corticosteroid, with a poly lactic-co-glycolic acid, or PLGA, matrix to provide extended pain relief. PLGA is a proven extended-release delivery vehicle that is metabolized to carbon dioxide and water as it releases drug in the IA space and is used in other approved drug products and surgical devices. The ZILRETTA microspheres slowly and continuously release TA into the knee to provide significant pain relief for 12 weeks, with some people experiencing pain relief through 16 weeks. ZILRETTA was approved by the FDA in October 2017 and launched in the U.S. shortly thereafter.
We are advancing a Phase 3 registration study to evaluate the safety and efficacy of ZILRETTA for the management of OA pain of the shoulder and concluded patient enrollment in April 2026. If the study is successful, we plan to seek approval to expand the ZILRETTA label to include OA pain of the shoulder, which could make ZILRETTA the first product with such an on-label indication.
ZILRETTA Clinical Benefits
ZILRETTA combines TA with a proprietary, extended-release microsphere technology to administer extended therapeutic concentrations in the joint and persistent analgesic effect. Based on the strength of both its pivotal and other clinical trials, we believe that ZILRETTA represents an important treatment option for the millions of patients in the U.S. in need of safe and effective extended relief from OA knee pain. The pivotal Phase 3 trial showed that ZILRETTA significantly reduced OA knee pain for 12 weeks, with some people experiencing pain relief through 16 weeks. We believe that ZILRETTA has the potential to become the corticosteroid of choice given its safety and efficacy profile, and the fact that it is the first and only extended-release corticosteroid on the market. In August 2021, the American Association of Orthopaedic Surgeons, or AAOS, updated its evidence-based clinical practice guidelines, finding ZILRETTA can improve patient outcomes over traditional immediate-release corticosteroids.
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Innovations in Genicular Outcomes Registry (IGOR)
We are currently sponsoring a prospective, real-world registry called the Innovations in Genicular Outcomes Registry, or IGOR, which is a patient-focused registry governed in collaboration with a steering committee of scientific experts that evaluates clinical, economic- and health-related patient-reported outcomes in patients who have received any treatment for knee OA pain, including total knee arthroplasty, or TKA, for a minimum of 18 months. A unique feature of IGOR is that if patients receive additional treatments for OA, data capture resets so that outcomes of their treatment journey can be followed over multiple years. Unlike in clinical studies, treatment decisions in IGOR are decided by physicians and patients in a shared decision-making manner rather than being driven by treatment assignment, so that outcomes are truly those from real-world applications. The IGOR registry is tracking outcomes of ZILRETTA and EXPAREL, along with iovera° and comparator treatments. In addition, the IGOR registry is tracking outcomes for OA and TKA related to our product candidates PCRX-201 and PCRX-2002.
The Osteoarthritis Market
OA is the most common form of arthritis. It is also called degenerative joint disease and occurs most frequently in the knees, hips, hands and spine. With OA, the cartilage within a joint begins to break down and the underlying bone begins to change. These changes usually develop slowly and worsen over time. OA can cause pain, stiffness and swelling. In some cases, it also causes reduced function and disability—some people are no longer able to do daily tasks or work. According to the Centers for Disease Control and Prevention (CDC), OA affects over 32.5 million adults in the U.S.
The lifetime risk of developing symptomatic knee OA is 45 percent according to the Arthritis Foundation. The prevalence of symptomatic knee OA increases with each decade of life, with the annual incidence of knee OA being highest between age 55 and 64 years old. There are 15 million individuals in the U.S. who have symptomatic knee OA, and nearly two million are under the age of 45. Surgical intervention is typically a last resort for patients suffering from OA of the knee.
Clinicians have the flexibility to individualize OA knee pain treatment with ZILRETTA based on patient factors and preference, physician training, site of care and reimbursement considerations.
The Unmet Need in Osteoarthritis of the Knee
OA knee pain has a significant impact on patients’ health and quality of life. Patients report being unable to engage in basic everyday tasks, such as climbing stairs, getting in and out of a car or participating in social activities. The pain associated with OA of the knee can impact individuals’ ability to sleep, work and exercise, resulting in serious impacts on overall patient health and quality of life.
The patient journey for OA knee pain often spans decades, and requires ongoing management across multiple stages of disease progression. Current treatments target symptoms through lifestyle modifications, physical therapy and pharmacological treatments, such as over-the-counter or prescription nonsteroidal anti-inflammatory drugs (NSAIDS) and intraarticular corticosteroids or HA. Ultimately, late-stage disease often leads to surgical intervention, such as TKA.
The lack of available safe and novel disease modifying treatments for OA of the knee highlights the high unmet need. As the U.S. population ages, the number of OA patients is increasing, and trends in recent years towards younger onset of disease mean that in the absence of a disease modifying therapy for OA, more patients will likely progress to disability and TKA. This would become an increasing burden not only for these patients, but for the healthcare system as well.
On the basis of the high prevalence of OA, its associated morbidity and excess mortality and the lack of therapies that can reverse, slow or stop the degenerative processes of OA, in 2018 the FDA recognized OA as a serious disease with significant unmet medical need.
ZILRETTA has demonstrated significant, durable relief of OA knee pain out to three months and, as such, is addressing an important unmet need among patients, physicians and healthcare payers. In addition, we are advancing a Phase 2 clinical study of our lead clinical asset, PCRX-201 (enekinragene inzadenovec), in moderate to severe knee OA as discussed below.
The HCAd Vector Platform
Our proprietary HCAd vector platform solves many of the challenges in the field of genetic medicine that have prevented its utilization in treating common diseases like OA. Key features include:
•The HCAd vector is much more efficient at delivering genes into cells compared to many other gene therapies that rely on adenovirus associated virus, or AAV, vectors. As a result, the desired effect can be achieved with much smaller doses;
•The vector used in the HCAd platform can carry up to 30,000 base pairs of DNA, which enables gene therapy with multiple or larger genes compared to AAV vectors;
•Genetic medicines based on the HCAd platform can be administered locally and have the potential for redosing at therapeutically appropriate intervals; and
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•Lower dose levels mean that thousands of doses can be produced in a single batch. As a result, we expect that any therapies built on the HCAd platform will have a commercially attractive and viable cost of goods profile.
Clinical Development Programs
PCRX-201
PCRX-201 is the lead program from our HCAd platform, and we believe it underscores its promise for treating common diseases given its encouraging data in OA. PCRX-201 is targeting the IL-1 pathway, which triggers inflammation in response to pathogens and cellular stress. IL-1Ra is a core regulator of this pathway and helps to keep inflammation in balance by turning off the IL-1 pathway when it’s not needed. As people get older, their bodies have a more challenging time maintaining that balance resulting in chronic IL-1-driven inflammation that eventually causes joint damage and pain.
After injection of PCRX-201, the HCAd vector enters joint cells and turns them into factories to boost cellular IL-1Ra production, which blocks IL-1 pathway activation to reduce inflammation and pain in the knee. PCRX-201 uses an inflammation-responsive promoter to only produce IL-1Ra when needed, mimicking how the body naturally responds to inflammation. In a Phase 1 proof-of-concept study of patients with moderate to severe OA of the knee, PCRX-201 was well tolerated with improvements in knee pain observed across all doses. The study enrolled 72 patients who were broken into two cohorts. The first cohort received one of three doses of PCRX-201. The second cohort received concurrent pre-treatment with an IA corticosteroid (methylprednisolone 40 mg), a technique common in gene therapy dosing to improve tolerability and gene transfer. PCRX-201 was well tolerated, with efficacy observed through at least 52 weeks at all doses and cohorts. The highest level of efficacy was achieved in the co-administered steroid group, which showed a greater percentage of patients with at least a 50% improvement in Western Ontario and McMaster Universities Osteoarthritis Index (WOMAC) pain and stiffness scores, as well as a meaningful improvement in Knee Injury and Osteoarthritis Outcome Score (KOOS) functional assessment. In all 3 doses, over 70% of patients saw a 50% or greater improvement in pain compared to baseline at week 16 and 78. PCRX-201 was well-tolerated with no serious treatment-emergent adverse events related to the treatment or procedure reported regardless of steroid pretreatment or dose level administered. While other therapies typically provide relief for three to six months, PCRX-201 has shown the potential to set a new standard with pain relief lasting at least 2 years from a single injection.
Given these highly encouraging Phase 1 data, we are advancing a Phase 2 clinical study in knee OA. The two-part, multicenter study—known as ASCEND—will involve approximately 135 patients, 45 to 80 years old with painful OA of the knee at a Kellgren-Lawrence (K-L) Grade of 2, 3 or 4. Subjects are randomly assigned to a treatment dose group and stratified by K-L Grade, a semiquantitative method for evaluating the severity of OA on a scale of 0-4.
ASCEND will evaluate two doses of PCRX-201, Dose A is 1.4 x 10 10 genome copies and Dose B is 1.4 x 10 11 genome copies. Patients are being randomized 1:1:1 to Dose A, Dose B or saline. All cohorts will receive concurrent pretreatment with an IA corticosteroid (methylprednisolone 40 mg).
We have completed patient enrollment in Part A of the study with a total of 49 patients randomized. We are currently screening subjects for Part B of the Phase 2 ASCEND study. Part B will randomize approximately 90 patients. The drug product used in Part B of the study will be manufactured using our newly developed, suspension-based batch manufacturing process intended for commercial scale-up. We expect to report topline twelve-month data results from Part A of the ASCEND study before the end of 2026.
For both Parts A and B of the study, the primary endpoint is the number and percent of treatment-emergent adverse events, adverse events of special interest, and serious adverse events for PCRX-201 plus steroid pretreatment versus saline plus steroid pretreatment from Week 1 through Week 52. The study’s secondary and exploratory endpoints include efficacy assessments such as changes in pain and physical function from baseline at Weeks 38 and 52. Efficacy will be measured using the Numerical Rating Scale (NRS), WOMAC and KOOS. Biomarkers, including structural endpoints, as well as immunogenicity and biodistribution will also be evaluated and all subjects will be followed for 5 years.
PCRX-201 has received Regenerative Medicine Advanced Therapy, or RMAT, designation from the FDA and Advanced Therapy Medicinal Products, or ATMP, designation from the EMA. RMAT and ATMP are regulatory programs designed to expedite the development and review processes for promising therapies targeting a significant unmet need with preliminary clinical evidence indicating that the therapy has the potential to offer a major advantage over existing treatments.
We also recently received an important validation of our PCRX-201 program with the acceptance of a Phase 1 manuscript for publication. The publication will appear in the Annals of the Rheumatic Diseases, a world-leading peer-reviewed rheumatology journal. The paper highlights the encouraging results from the 72-patient Phase 1 study supporting further development of PCRX-201.
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Other HCAd Product Candidates
In addition to PCRX-201, we currently have prioritized three other preclinical HCAd-based gene therapy programs that we believe have disease modifying potential in other painful conditions. These include Investigational New Drug (IND) enabling studies of PCRX-1002 for Dry Eye Disease and PCRX-1003 for Degenerative Disc Disease. We are also advancing a preclinical program for PCRX-1001 in canine OA, recently completed a pilot safety study and our pilot efficacy study is now initiating. We believe this indication offers significant out-licensing potential.
PCRX-2002
In November 2025, we announced an exclusive worldwide license agreement with AmacaThera, Inc., or AmacaThera, a clinical-stage biotechnology company specializing in drug delivery, for the development and commercialization of PCRX-2002 (previously known by AmacaThera as AMT-143). PCRX-2002 is a long-acting formulation of the non-opioid analgesic ropivacaine for postsurgical pain. It is a slow-release, non-opioid local analgesic providing long-acting post-operative pain relief. PCRX-2002 is administered via instillation at the time of the surgery and utilizes AmacaThera’s innovative hydrogel platform, a fast-gelling physical hydrogel composed of two well-established polymers enabling slow-release while minimizing systemic side effects. It is delivered via a conventional syringe and rapidly forms a depot as it warms to body temperature. In a Phase 1 study, PCRX-2002 demonstrated sustained release of ropivacaine through 14 days. We expect to initiate a Phase 2 program in bunionectomy later this year in Canada.
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Product Portfolio and Internal Pipeline
Our current product portfolio and internal product candidate pipeline, along with anticipated milestones over the next 12 to 18 months, are summarized in the table below
Global Expansion
In January 2026, we and LG Chem, Ltd., or LG Chem, entered into a partnership agreement to expand access to EXPAREL in select Asian–Pacific markets. Under the terms of the partnership, LG Chem has the exclusive rights to commercialize EXPAREL in the region. We will receive a contractually stated price and tiered royalties on future commercial sales by LG Chem in its licensed territories. We will manufacture EXPAREL and LG Chem will be responsible for securing regulatory approvals in the licensed territories. LG Chem has filed for marketing authorization in South Korea and plans to do so in Thailand in the second half of 2026. We currently expect that revenue under this partnership will begin in 2027 and extend into the mid-2040s.
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Results of Operations
Comparison of the Three and Six Months Ended June 30, 2026 and 2025
Revenues
Our net product sales are primarily within the U.S. and consist of EXPAREL, ZILRETTA and sales of bupivacaine liposome injectable suspension for veterinary use. Royalty revenues are related to the sale of bupivacaine liposome injectable suspension for veterinary use. In June 2026, we entered into a Stock and Asset Purchase Agreement with Zimmer to divest iovera°. Net product sales of iovera° will be recognized through the completion of the Transaction on July 31, 2026, after which we will no longer recognize revenue associated with iovera°.
The following table provides information regarding our revenues during the periods indicated, including percent changes (dollar amounts in thousands):

| Three Months Ended June 30, |  | % Increase / (Decrease) |  | Six Months Ended June 30, |  | % Increase / (Decrease)
| 2026 |  | 2025 |  |  | 2026 |  | 2025 |
Net product sales: |  |  |  |  |  |  |  |  |  |  |
EXPAREL | $ | 147,823 |  |  | $ | 142,917 |  |  | 3% |  | $ | 291,097 |  |  | $ | 279,446 |  |  | 4%
ZILRETTA | 32,648 |  |  | 31,334 |  |  | 4% |  | 59,415 |  |  | 54,672 |  |  | 9%
iovera° | 6,806 |  |  | 5,588 |  |  | 22% |  | 12,982 |  |  | 10,711 |  |  | 21%
Bupivacaine liposome injectable suspension | 3,216 |  |  | 508 |  |  | 100+% |  | 4,375 |  |  | 3,112 |  |  | 41%
Total net product sales | 190,493 |  |  | 180,347 |  |  | 6% |  | 367,869 |  |  | 347,941 |  |  | 6%
Royalty revenue | 1,906 |  |  | 752 |  |  | 100+% |  | 1,906 |  |  | 2,081 |  |  | (8)%
Total revenues | $ | 192,399 |  |  | $ | 181,099 |  |  | 6% |  | $ | 369,775 |  |  | $ | 350,022 |  |  | 6%

EXPAREL revenue increased 3% and 4% in the three and six months ended June 30, 2026 versus 2025, respectively. Components of the increase included a 4% and 6% increase in gross vial volume in the three and six months ended June 30, 2026 versus 2025, respectively, partially offset by a shift in product mix, and a less than 1% lower net selling price in both periods, as group purchasing organization contracting discounts more than offset a price increase.
ZILRETTA revenue increased 4% and 9% in the three and six months ended June 30, 2026 versus 2025, respectively, due to respective 2% and 6% increases in kit volume and 2% and 3% increases in net selling price primarily due to price increases, partially offset by higher customer discounting.
Net product sales of iovera° increased 22% and 21% in the three and six months ended June 30, 2026 versus 2025, respectively, driven by increases in Smart Tip volume of 19% and 23%, partially offset by decreases in Smart Tip net selling price of 2% and 3%. In June 2026, we entered into a Stock and Asset Purchase Agreement with Zimmer to divest iovera° for up to $140.0 million, including an upfront payment of $70.0 million. In July 2026, we received an upfront payment of $73.6 million from the closing of the Transaction that divested iovera° to Zimmer, consisting of an upfront payment of $70.0 million and $3.6 million of adjustments for cash, accounts receivable, indebtedness, transaction expenses and inventory. The Transaction closed on July 31, 2026, after which we will no longer recognize revenue associated with iovera°. For more information, see Note 3, Assets and Liabilities Held for Sale, to our condensed consolidated financial statements included herein.
Bupivacaine liposome injectable suspension revenue increased by more than 100% and 41% in the three and six months ended June 30, 2026 versus 2025, respectively, due to supply price increases and the timing of orders placed by our commercial partner for veterinary use. The related royalties also increased by more than 100% and decreased 8% in the three and six months ended June 30, 2026 versus 2025, respectively, primarily due to both the timing of orders and the sales mix of vial sizes.
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The following tables provide a summary of activity with respect to our sales-related allowances and accruals related to EXPAREL and ZILRETTA for the six months ended June 30, 2026 and 2025 (in thousands):

June 30, 2026 |  | Returns Allowances |  | Prompt Payment Discounts |  | Service Fees |  | Customer Rebates and Chargebacks |  | Government Rebates |  | Total
Balance at December 31, 2025 |  | $ | 2,159 |  |  | $ | 1,574 |  |  | $ | 5,021 |  |  | $ | 6,394 |  |  | $ | 1,719 |  |  | $ | 16,867 |
Provision |  | 1,530 |  |  | 7,607 |  |  | 14,225 |  |  | 99,027 |  |  | 1,724 |  |  | 124,113 |
Payments |  | (1,524) |  |  | (7,441) |  |  | (13,075) |  |  | (97,778) |  |  | (1,329) |  |  | (121,147) |
Balance at June 30, 2026 |  | $ | 2,165 |  |  | $ | 1,740 |  |  | $ | 6,171 |  |  | $ | 7,643 |  |  | $ | 2,114 |  |  | $ | 19,833 |

June 30, 2025 |  | Returns Allowances |  | Prompt Payment Discounts |  | Service Fees |  | Customer Rebates and Chargebacks |  | Government Rebates |  | Total
Balance at December 31, 2024 |  | $ | 1,600 |  |  | $ | 1,308 |  |  | $ | 4,875 |  |  | $ | 4,863 |  |  | $ | 1,707 |  |  | $ | 14,353 |
Provision |  | 702 |  |  | 6,918 |  |  | 11,189 |  |  | 76,044 |  |  | 1,813 |  |  | 96,666 |
Payments |  | (267) |  |  | (6,838) |  |  | (11,320) |  |  | (76,113) |  |  | (1,815) |  |  | (96,353) |
Balance at June 30, 2025 |  | $ | 2,035 |  |  | $ | 1,388 |  |  | $ | 4,744 |  |  | $ | 4,794 |  |  | $ | 1,705 |  |  | $ | 14,666 |

Total reductions of gross product sales from sales-related allowances and accruals were $124.1 million and $96.7 million, or 25.2% and 21.7% of gross product sales, for the six months ended June 30, 2026 and 2025, respectively. The overall 3.5% increase in sales-related allowances and accruals as a percentage of gross product sales was primarily related to accruals as a result of higher chargeback-related allowances from expanded contracting efforts and increased product returns due to weather-related disruptions in the first quarter of 2026.

Cost of Goods Sold
Cost of goods sold primarily relates to the costs to produce, package and deliver our products to customers. These expenses include labor, raw materials, manufacturing overhead and occupancy costs, depreciation of facilities, quality control and engineering.
The following table provides information regarding our cost of goods sold and gross margin during the periods indicated, including percent changes (dollar amounts in thousands):

| Three Months Ended June 30, |  | % Increase / (Decrease) |  | Six Months Ended June 30, |  | % Increase / (Decrease)
| 2026 |  | 2025 |  |  | 2026 |  | 2025 |
Cost of goods sold (exclusive of amortization of acquired intangible assets) | $ | 44,164 |  | $ | 40,866 |  | 8% |  | $ | 80,577 |  | $ | 75,172 |  | 7%
Gross margin | 77 | % |  | 77 | % |  |  |  | 78 | % |  | 79 | % |  |

Gross margin was flat and decreased one percentage point in the three and six months ended June 30, 2026 versus 2025, respectively, due to higher EXPAREL product costs resulting from lower production volumes. Production volumes were higher in the prior year in order to achieve higher inventory levels to meet increased demand. This was substantially offset by fewer inventory reserves and less downtime in the current year.

Research and Development Expenses
Research and development, or R&D, expenses primarily consist of costs related to clinical trials and related outside services, product development and other R&D costs, including trials that we are conducting to generate new data for EXPAREL, ZILRETTA and iovera°, clinical trials for PCRX-201 and PCRX-2002 and stock-based compensation expense. Clinical and preclinical development expenses include costs for clinical personnel, clinical trials performed by third-parties, materials and supplies, database management and other third-party fees. Product development expenses include development costs for our products, which include personnel, research equipment, materials and contractor costs for process development and product candidates, and facility costs for our research space. Regulatory and other expenses include regulatory activities related to unapproved products and indications, medical information and scientific communication expenses, expenses related
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to our IGOR registry study and related personnel. Stock-based compensation expense relates to the costs of stock option grants, awards of restricted stock units, or RSUs, and performance share units, or PSUs, and our employee stock purchase plan, or ESPP. Additionally, as part of the acquisition of GQ Bio Therapeutics GmbH, or GQ Bio, in February 2025 (the “GQ Bio Acquisition”), expenses related to a key employee holdback are also included in product development.
The following table provides a breakout of our R&D expenses during the periods indicated, including percent changes (dollar amounts in thousands):

| Three Months Ended June 30, |  | % Increase / (Decrease) |  | Six Months Ended June 30, |  | % Increase / (Decrease)
| 2026 |  | 2025 |  |  | 2026 |  | 2025 |
Clinical and preclinical development | $ | 10,794 |  | $ | 14,119 |  | (24)% |  | $ | 23,664 |  | $ | 26,726 |  | (11)%
Product development | 13,390 |  | 9,028 |  | 48% |  | 23,715 |  | 17,457 |  | 36%
Regulatory and other | 3,454 |  | 2,646 |  | 31% |  | 6,501 |  | 5,062 |  | 28%
Stock-based compensation | 2,605 |  | 2,407 |  | 8% |  | 4,435 |  | 4,648 |  | (5)%
Total research and development expense | $ | 30,243 |  | $ | 28,200 |  | 7% |  | $ | 58,315 |  | $ | 53,893 |  | 8%
% of total revenues | 16 | % |  | 16 | % |  |  |  | 16 | % |  | 15 | % |  |

Total R&D expense increased 7% and 8% in the three and six months ended June 30, 2026 versus 2025, respectively.
Clinical and preclinical development expense decreased 24% and 11% in the three and six months ended June 30, 2026 versus 2025, respectively, primarily due to the completion of patient enrollment in Part A of our PCRX-201 Phase 2 ASCEND trial for knee OA, the ZILRETTA Shoulder OA trial, the iovera° Spasticity trial, as well as completion of an EXPAREL Phase 1 trial for intrathecal administration. Additional reductions were driven by fewer Investigator Initiated Trial (IIT) milestones achieved. In the three months ended June 30, 2026 versus 2025, these decreases were partially offset by start-up expenses related to the PCRX-2002 Phase 2 bunionectomy trial. For the six months ended June 30, 2026 versus 2025, these decreases were also partially offset by ongoing enrollment in cohort 2 of our EXPAREL pediatric trial.
Product development expense increased 48% and 36% in the three and six months ended June 30, 2026 versus 2025, respectively, due to continued investment in our HCAd platform, primarily for the PCRX-201 program. In addition, we recorded $0.6 million and $1.5 million in the three and six months ended June 30, 2026, respectively, related to a key employee holdback from the GQ Bio Acquisition.
Regulatory and other expense increased 31% and 28% in the three and six months ended June 30, 2026 versus 2025, respectively, due to increased headcount within the function, as well as additional subjects enrolled in the IGOR registry study.
Stock-based compensation expense increased 8% in the three months ended June 30, 2026 versus 2025 primarily due to the acceleration of stock-based compensation awards related to a terminated employee. Stock-based compensation decreased 5% in the six months ended June 30, 2026 versus 2025 primarily due to the forfeiture of equity awards in the current periods.

Selling, General and Administrative Expenses
Sales and marketing expenses primarily consist of compensation and benefits for our sales force and personnel that support our commercial, sales, marketing, medical and scientific affairs operations, and insights and analytics. They also include expenses related to the commercialization of our products—including marketing, health outcome communications, provider-level market access, patient reimbursement support and customer educational programs. General and administrative expenses consist of compensation and benefits for legal, finance, regulatory activities related to approved products and indications, compliance, information technology, human resources, business development, executive management and other supporting personnel. It also includes professional fees for legal, audit, tax and consulting services. Stock-based compensation expense relates to the costs of stock option grants, awards of RSUs, PSUs and our ESPP.
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The following table provides information regarding our selling, general and administrative expenses during the periods indicated, including percent changes (dollar amounts in thousands):

| Three Months Ended June 30, |  | % Increase / (Decrease) |  | Six Months Ended June 30, |  | % Increase / (Decrease)
| 2026 |  | 2025 |  |  | 2026 |  | 2025 |
Sales and marketing | $ | 52,117 |  | $ | 50,964 |  | 2% |  | $ | 110,283 |  | $ | 106,535 |  | 4%
General and administrative | 29,148 |  | 26,231 |  | 11% |  | 54,860 |  | 46,840 |  | 17%
Stock-based compensation | 10,544 |  | 11,383 |  | (7)% |  | 20,610 |  | 21,979 |  | (6)%
Total selling, general and administrative expense | $ | 91,809 |  | $ | 88,578 |  | 4% |  | $ | 185,753 |  | $ | 175,354 |  | 6%
% of total revenues | 48 | % |  | 49 | % |  |  |  | 50 | % |  | 50 | % |  |

Total selling, general and administrative expense increased 4% and 6% in the three and six months ended June 30, 2026 versus 2025, respectively.
Sales and marketing expense increased 2% and 4% in the three and six months ended June 30, 2026 versus 2025, respectively. The increase in the six months ended June 30, 2026 was driven by expanding our market access and reimbursement teams to strengthen our key commercial capabilities and execute on commercial payer separate reimbursement for EXPAREL.
General and administrative expense increased 11% and 17% in the three and six months ended June 30, 2026 versus 2025, respectively, primarily driven by a 2025 recovery of $5.2 million in legal expenses related to litigation pertaining to the acquisition of MyoScience, Inc., third party investor relations advisory services, as well as increased headcount in our business development, procurement and legal departments. The three months ended June 30, 2026 included additional costs related to the solicitation of proxies in connection with a contested election of directors at our 2026 annual meeting of stockholders that we would not typically have incurred in the absence of a contested election.
Stock-based compensation expense decreased 7% and 6% for the three and six months ended June 30, 2026 versus 2025, respectively, primarily due to the prior year equity compensation related to our former Chief Executive Officer whose post-employment consulting services ceased in August 2025.
In October 2025, we received two separate Paragraph IV Certifications from two Chinese generic drug manufacturers—The WhiteOak Group, Inc., or WhiteOak, of Rockville, Maryland (a subsidiary of Zhejiang Haichang Biotechnology Co., Ltd.) and Qilu Pharmaceutical (Hainan) Co., Ltd., or Qilu—each advising that they had submitted an Abbreviated New Drug Application (ANDA) to the FDA seeking authorization from the FDA to manufacture, use or sell a generic version of EXPAREL in the U.S. In November 2025, we filed a patent infringement suit against WhiteOak and Qilu. As a result, we have incurred and expect to continue to incur additional legal costs to defend our intellectual property, although we cannot predict the extent of costs or the outcome of this matter at this time. For more information, see Note 17, Commitments and Contingencies, to our condensed consolidated financial statements included herein.

Amortization of Acquired Intangible Assets
The following table provides a summary of the amortization of acquired intangible assets during the periods indicated, including percent changes (dollar amounts in thousands):

| Three Months Ended June 30, |  | % Increase / (Decrease) |  | Six Months Ended June 30, |  | % Increase / (Decrease)
| 2026 |  | 2025 |  |  | 2026 |  | 2025 |
Amortization of acquired intangible assets | $ | 14,322 |  |  | $ | 14,322 |  |  | —% |  | $ | 28,644 |  |  | $ | 28,644 |  |  | —%

As part of the acquisitions of Flexion Therapeutics, Inc., or Flexion, (in 2021) and MyoScience, Inc. (in 2019), we acquired intangible assets consisting of developed technology intangible assets and customer relationships. In June 2026, $53.2 million, net, of developed technologies and a nominal amount of customer relationships related to iovera° from the acquisition of MyoScience, Inc. were reclassified to assets held for sale in conjunction with entering into the Purchase Agreement with Zimmer. Amortization on these intangible assets ceased being recorded at the time the assets were classified as held for sale. As such, the amount of amortization of acquired intangible assets will decrease during the second half of 2026,
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assuming no changes in the gross carrying value of our remaining intangible assets. For more information, see Note 8, Goodwill and Intangible Assets, to our condensed consolidated financial statements included herein.

Other Operating Expenses (Gains), Net
The following table provides a summary of the costs related to the other operating expenses, net during the periods indicated, including percent changes (dollar amounts in thousands):

| Three Months Ended June 30, |  | % Increase / (Decrease) |  | Six Months Ended June 30, |  | % Increase / (Decrease)
| 2026 |  | 2025 |  |  | 2026 |  | 2025 |
Divestiture-related expenses | $ | 5,931 |  |  | $ | — |  |  | N/A |  | $ | 5,931 |  |  | $ | — |  |  | N/A
Contingent consideration charges (gains) | 1,663 |  |  | (357) |  |  | N/A |  | (614) |  |  | (3,032) |  |  | (80)%
Acquisition-related expenses | — |  |  | 991 |  |  | (100)% |  | — |  |  | 2,502 |  |  | (100)%
Legal settlement | — |  |  | — |  |  | N/A |  | — |  |  | 7,000 |  |  | (100)%
Total other operating expenses, net | $ | 7,594 |  |  | $ | 634 |  |  | 100+% |  | $ | 5,317 |  |  | $ | 6,470 |  |  | (18)%

Total other operating expenses, net significantly increased in the three months ended June 30, 2026 versus 2025. Total other operating expenses, net decreased 18% in the six months ended June 30, 2026 versus 2025.
During the three and six months ended June 30, 2026, we recognized divestiture-related expenses of $5.9 million, primarily related to third-party services and legal fees associated with divesting iovera°. For more information, see Note 3, Assets and Liabilities Held for Sale, to our condensed consolidated financial statements included herein.
During the three months ended June 30, 2026, we recognized contingent consideration charges of $1.7 million due to revisions to the latest discount rates. During the six months ended June 30, 2026, we recognized contingent consideration gains of $0.6 million due to a reduction in our sales forecast through the milestone expiration date of December 31, 2030, partially offset by revisions to the latest discount rates. During the three and six months ended June 30, 2025, we recognized contingent consideration gains of $0.4 million and $3.0 million, respectively, primarily due to revisions to the latest discount rates.
During the three and six months ended June 30, 2025, we recognized acquisition-related expenses of $1.0 million and $2.5 million, respectively, primarily related to third-party services and legal fees associated with the GQ Bio Acquisition.
During the six months ended June 30, 2025, we recognized legal settlement costs of $7.0 million related to the settlement of patent infringement suits against eVenus Pharmaceutical Laboratories, Inc., its parent company—Jiangsu Hengrui Pharmaceuticals, Co. Ltd., and Fresenius Kabi USA, LLC.
For more information on these events, see Note 11, Financial Instruments, Note 16, Other Operating Expenses (Gains), Net and Note 17, Commitments and Contingencies, to our condensed consolidated financial statements included herein.

Other Expense, Net
The following table provides information regarding other expense, net during the periods indicated, including percent changes (dollar amounts in thousands):

| Three Months Ended June 30, |  | % Increase / (Decrease) |  | Six Months Ended June 30, |  | % Increase / (Decrease)
| 2026 |  | 2025 |  |  | 2026 |  | 2025 |
Interest income | $ | 1,944 |  |  | $ | 5,008 |  |  | (61)% |  | $ | 3,874 |  |  | $ | 11,903 |  |  | (67)%
Interest expense | (3,622) |  |  | (4,695) |  |  | (23)% |  | (7,321) |  |  | (9,275) |  |  | (21)%
Other, net | (34) |  |  | (10,739) |  |  | (100)% |  | (169) |  |  | (6,338) |  |  | (97)%
Total other expense, net | $ | (1,712) |  |  | $ | (10,426) |  |  | (84)% |  | $ | (3,616) |  |  | $ | (3,710) |  |  | (3)%

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During the three and six months ended June 30, 2026, total other expense, net was $1.7 million and $3.6 million, respectively. During the three and six months ended June 30, 2025, total other expense, net was $10.4 million and $3.7 million, respectively.
Interest income decreased 61% and 67% in the three and six months ended June 30, 2026 versus 2025, respectively, due to interest realized in the prior year on a GQ Bio note receivable investment we had made prior to the GQ Bio Acquisition as well as lower overall investment balances and interest rates.
Interest expense decreased 23% and 21% in the three and six months ended June 30, 2026 versus 2025, respectively, primarily due to lower outstanding debt principal driven by the repayment of the 2025 Notes (as defined herein) in the third quarter of 2025. For more information, see Note 10, Debt, to our condensed consolidated financial statements included herein.
The $10.7 million and $6.3 million other net loss during the three and six months ended June 30, 2025, respectively, was primarily driven by an impairment of an equity investment and convertible note receivable totaling $11.0 million. For the six months ended June 30, 2025, the other net loss was partially offset by a realized gain associated with a previously acquired equity investment in GQ Bio that increased in fair value resulting from the GQ Bio Acquisition. For more information, see Note 11, Financial Instruments, to our condensed consolidated financial statements included herein.

Income Tax Benefit (Expense)
The following table provides information regarding our income tax expense during the periods indicated, including percent changes (dollar amounts in thousands):

| Three Months Ended June 30, |  | % Increase / (Decrease) |  | Six Months Ended June 30, |  | % Increase / (Decrease)
| 2026 |  | 2025 |  |  | 2026 |  | 2025 |
Income (loss) before income taxes | $ | 2,555 |  | $ | (1,927) |  | N/A |  | $ | 7,553 |  | $ | 6,779 |  | 11%
Income tax benefit (expense) | $ | 2,098 |  | $ | (2,920) |  | N/A |  | $ | 16 |  | $ | (6,814) |  | (100)%
Effective tax rate | (82) | % |  | (152) | % |  |  |  | 0 | % |  | 101 | % |  |

We recorded income tax benefits of $2.1 million and less than $0.1 million for the three and six months ended June 30, 2026, respectively. We recorded income tax expense of $2.9 million and $6.8 million for the three and six months ended June 30, 2025, respectively.
The effective tax rates of (82)% and 0% for the three and six months ended June 30, 2026, respectively, differed from the U.S. statutory rate of 21% primarily due to the reversal of our U.K. operating subsidiary’s valuation allowance, partially offset by costs related to non-deductible executive compensation and non-deductible stock-based compensation.
The effective tax rates of (152)% and 101% for the three and six months ended June 30, 2025, respectively, differed from the U.S. statutory rate of 21% primarily due to costs related to non-deductible stock-based compensation, non-deductible executive compensation and a non-U.S. valuation allowance.
During the second quarter of 2026, a discrete benefit of $6.4 million was recorded resulting from a change in judgment regarding future-year realizability of deferred tax assets in our U.K. operations, primarily related to fixed asset temporary differences. The reduction reflects our conclusion, based on all available positive and negative evidence, that realization of the U.K. deferred tax assets is more likely than not. The discrete benefit significantly reduced our effective tax rate for the three and six months ended June 30, 2026.
In June 2026, we entered into a Stock and Asset Purchase Agreement with Zimmer to divest our iovera° business. The Transaction closed on July 31, 2026. Both parties agreed to treat the transaction as a deemed asset sale for U.S. federal income tax purposes through an election under Section 338(h)(10) of the Internal Revenue Code. As the Transaction closed subsequent to June 30, 2026, the income tax effects of the transaction, including changes in the valuation allowance for capital-loss carryforwards, were not recognized in the income tax provisions for the three and six months ended June 30, 2026. For more information, see Note 3, Assets and Liabilities Held for Sale, to our condensed consolidated financial statements included herein.
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Liquidity and Capital Resources
Since our inception in 2006, we have devoted most of our cash resources to manufacturing, R&D and selling, general and administrative activities related to the development and commercialization of EXPAREL. In addition, we acquired ZILRETTA as part of the acquisition of Flexion Therapeutics, Inc. in November 2021 and GQ Bio in February 2025 to further develop PCRX-201 and establish our HCAd platform, as well as completing other strategic acquisitions of companies, products and product candidates. We are primarily dependent on the commercial success of EXPAREL and ZILRETTA. We have financed our operations primarily with the proceeds from the sale of convertible senior notes and other debt, common stock and product sales. As of June 30, 2026, we had an accumulated deficit of $191.8 million, cash and cash equivalents and available-for-sale investments of $251.0 million and working capital of $493.2 million.
In July 2026, we received an upfront payment of $73.6 million from the closing of the Transaction that divested iovera° to Zimmer, consisting of an upfront payment of $70.0 million and $3.6 million of adjustments for cash, accounts receivable, indebtedness, transaction expenses and inventory.
We expect that our cash and cash equivalents and available-for-sale investments on hand will be adequate to cover our short-term liquidity needs, and that we would be able to access other sources of financing should the need arise.
Summary of Cash Flows
The following table summarizes our cash flows from operating, investing and financing activities for the periods indicated (in thousands):

|  | Six Months Ended June 30,
Condensed Consolidated Statements of Cash Flows Data: |  | 2026 |  | 2025
Net cash provided by (used in): |  |  |  |
Operating activities |  | $ | 83,140 |  |  | $ | 47,471 |
Investing activities |  | 31,200 |  |  | 36,534 |
Financing activities |  | (67,048) |  |  | (60,499) |
Effect of exchange rate changes on cash and cash equivalents |  | 38 |  |  | 204 |
Net increase in cash and cash equivalents |  | $ | 47,330 |  |  | $ | 23,710 |

Operating Activities
During the six months ended June 30, 2026, net cash provided by operating activities was $83.1 million, compared to $47.5 million during the six months ended June 30, 2025. The increase of $35.7 million was primarily attributable to an initiative to increase inventory days on hand in 2025 and was partially offset by fewer receipts on our accounts receivable due to the extension of payment terms in 2026 and the recovery of $5.2 million in legal expenses received in 2025.
Investing Activities
During the six months ended June 30, 2026, net cash provided by investing activities was $31.2 million, which reflected $35.6 million of inflows from available-for-sale investment sales (net of purchases), partially offset by $4.1 million of capital expenditures.
During the six months ended June 30, 2025, net cash provided by investing activities was $36.5 million, which reflected $65.7 million of inflows from available-for-sale investment sales (net of purchases), partially offset by $16.7 million related to the cash consideration for the GQ Bio Acquisition (net of cash acquired), as well as $11.2 million of capital expenditures for manufacturing product fill lines and the build-out of our new corporate headquarters in Brisbane, California.
Financing Activities
During the six months ended June 30, 2026, net cash used in financing activities was $67.0 million, which primarily consisted of $50.0 million in repurchases of common stock under a $300.0 million share repurchase program; $10.0 million in repayments of the Revolving Credit Facility (as defined herein); $7.8 million to withhold shares of common stock to cover employee tax withholding obligations on restricted stock unit vests, as well as $1.3 million of excise taxes paid on repurchases of our common stock. Partially offsetting these uses were proceeds of $1.7 million from the issuance of common stock through our ESPP and $0.5 million from the exercise of stock options.
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During the six months ended June 30, 2025, net cash used in financing activities was $60.5 million, which primarily consisted of $50.0 million in purchases of treasury stock under the then-new $300.0 million share repurchase program authorized by our board of directors in April 2025, $6.6 million of voluntary prepayments associated with the TLA Term Loan, as well as $5.5 million to withhold shares of common stock to cover employee tax withholding obligations on restricted stock unit vests. There were also $1.6 million of proceeds from the issuance of common stock through our ESPP.
See Note 10, Debt, to our condensed consolidated financial statements included herein for further discussion of the TLA Term Loan and the Revolving Credit Facility. For more information on our share repurchase program, see Note 12, Stockholders' Equity, to our condensed consolidated financial statements included herein.
Debt
2029 Convertible Senior Notes
In May 2024, we completed a private placement of $287.5 million in aggregate principal amount of our 2.125% convertible senior notes due 2029, or 2029 Notes, and entered into an indenture with respect to the 2029 Notes. The 2029 Notes accrue interest at a fixed rate of 2.125% per year, payable semiannually in arrears on May 15 th and November 15 th of each year. The 2029 Notes mature on May 15, 2029.
At June 30, 2026, all $287.5 million of principal was outstanding on the 2029 Notes. See Note 10, Debt, to our condensed consolidated financial statements included herein for further discussion.
Revolving Credit Facility
On July 3, 2025, we entered into a credit agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent, swingline lender and an issuing bank, and certain lenders, to, among other things, refinance the indebtedness outstanding under our TLA Credit Agreement (as defined below) and provide ongoing working capital. The Credit Agreement provides for a senior secured revolving credit facility (the “Revolving Credit Facility”) in an aggregate commitment amount of $300.0 million, with a letter of credit sublimit of $10.0 million and swingline loan sublimit of $15.0 million. The credit facility is secured by substantially all of our and each subsidiary guarantor’s assets and matures on July 3, 2030, subject to certain exceptions set forth in the Credit Agreement. Subject to certain conditions, we may, at any time, on one or more occasions, add one or more new classes of term facilities and/or increase the principal amount of any existing class of term loans by requesting one or more incremental term facilities in an aggregate principal amount not to exceed the greater of $225.0 million and 100% of Consolidated EBITDA (as defined in the Credit Agreement).
Each revolving loan borrowing which is an alternate base rate borrowing will bear interest at a rate per annum equal to (i) a base rate, plus (ii) a spread based on our Senior Secured Net Leverage Ratio (as defined in the Credit Agreement) ranging from 1.50% to 2.25%. Each revolving loan borrowing which is a term benchmark borrowing or daily simple SOFR (as defined in the Credit Agreement) borrowing will bear interest at a rate per annum equal to (i) a forward-looking term rate based on SOFR or a rate determined by reference to the daily simple SOFR, plus (ii) a spread based on our Senior Secured Net Leverage Ratio ranging from 2.50% to 3.25%.
The Credit Agreement also contains customary affirmative and negative covenants, financial covenants, representations and warranties, events of default and other provisions. As of June 30, 2026, we were in compliance with all covenants under the Credit Agreement.
Upon entering into the Credit Agreement, we borrowed $101.0 million under the Revolving Credit Facility, of which $81.0 million is outstanding as of June 30, 2026. We made repayments of $10.0 million during the six months ended June 30, 2026.
Future Capital Requirements
We believe that our existing cash and cash equivalents, available-for-sale investments and cash received from product sales will be sufficient to enable us to fund our operating expenses, capital expenditure requirements and payment of the interest and principal on our Revolving Credit Facility and 2029 Notes through the next 12 months from the date of this filing. Our future use of operating cash and capital requirements will depend on many forward-looking factors, including, but not limited to:
•the cost and timing of the potential milestone payments to former Flexion Therapeutics, Inc. stockholders, which could be up to an aggregate of $372.3 million if certain regulatory and commercial milestones are met. See Note 11, Financial Instruments, to our condensed consolidated financial statements included herein for more information;
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•the impact of global economic conditions—including the impact of inflation and tariffs—on our products, material and labor costs, supply chain, longer lead-times, an inability to procure a sufficient supply of materials, our operating expenses and our business strategy;
•the timing of and extent to which the holders of our 2029 Notes elect to convert their 2029 Notes, and the amount of borrowings and interest payments on our Revolving Credit Facility. Per the terms of the 2029 Notes, we will settle the principal in cash. For any excess conversion value, holders may receive cash, shares of our common stock or a combination of cash and shares of our common stock, at our option;
•the costs and our ability to successfully continue to expand the commercialization of EXPAREL and ZILRETTA;
•the cost and timing of expanding and maintaining our manufacturing facilities and capabilities;
•the cost and timing of additional strategic investments, including additional investments under existing agreements;
•the costs related to legal and regulatory matters, including those to develop and defend our intellectual property;
•the costs of performing additional clinical trials for our products and product candidates, including the additional pediatric trials required by the FDA and EMA as a condition of the approval of EXPAREL and clinical trials for PCRX-201, PCRX-2002 and other clinical-stage product candidates;
•the costs for the development and commercialization of other product candidates;
•the costs and timing of future payments under our employee benefit plans, including but not limited to our cash long-term incentive plan and non-qualified deferred compensation plan;
•the extent to which we acquire or invest in products, businesses and technologies; and
•the timing and the number of shares of our common stock either repurchased through our $300.0 million share repurchase program announced in April 2025, which has an expiration date of December 31, 2026 or withheld to cover employee tax withholding obligations on restricted stock unit vests.
We may require additional debt or equity financing to meet our future operating and capital requirements. We have no committed external sources of funds, and additional equity or debt financing may not be available on acceptable terms, if at all. In particular, capital market disruptions or negative economic conditions may hinder our access to capital.
Critical Accounting Estimates
For a description of critical accounting policies that affect our significant judgments and estimates used in the preparation of our consolidated financial statements, refer to our 2025 Annual Report. There have been no significant changes to our critical accounting policies nor any recently issued accounting pronouncements that are expected to have a material impact on our financial results since December 31, 2025.
Contractual Obligations
In June 2026, we entered into a new lease obligation in Brisbane, California of approximately $8.0 million to retain our principal executive offices and corporate headquarters through 2036.
Except as set forth above, there have been no material changes in our contractual obligations relating to our indebtedness, lease obligations and purchase obligations from those reported in our 2025 Annual Report. For more information on our contractual obligations and commercial commitments, see Part II, Item 7 in our 2025 Annual Report.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The primary objective of our cash equivalents and investment activities is to preserve principal while at the same time maximizing the income that we receive from our investments without significantly increasing risk. We invest in corporate bonds, commercial paper, asset-backed securities and U.S. Treasury and other government agency notes for purposes other than trading which are reported at fair value. These securities are subject to interest rate risk and credit risk. This means that a change in prevailing interest rates may cause the fair value of the investment to fluctuate. For example, if we hold a security that was issued with a fixed interest rate at the then-prevailing rate and the interest rate later rises, we expect that the fair value of our investment will decline. A hypothetical 100 basis point increase in interest rates would have reduced the fair value of our available-for-sale securities at June 30, 2026 by approximately $0.1 million.
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The fair value of our 2029 Notes is impacted by both the fair value of our common stock and interest rate fluctuations. As of June 30, 2026, the estimated fair value of the 2029 Notes was $999 per $1,000 principal amount. See Note 10, Debt, to our condensed consolidated financial statements included herein for further discussion of our 2029 Notes, which bear interest at a fixed rate. At June 30, 2026, $287.5 million of principal remains outstanding on the 2029 Notes.
The Revolving Credit Facility provides for a senior secured revolving credit facility in an aggregate commitment amount of $300.0 million, with a letter of credit sublimit of $10.0 million and swingline loan sublimit of $15.0 million. Each revolving loan borrowing which is an alternate base rate borrowing will bear interest at a rate per annum equal to (i) a base rate, plus (ii) a spread based on our Senior Secured Net Leverage Ratio (as defined in the Credit Agreement) ranging from 1.50% to 2.25%. Each revolving loan borrowing which is a term benchmark borrowing or daily simple SOFR (as defined in the Credit Agreement) borrowing will bear interest at a rate per annum equal to (i) a forward-looking term rate based on SOFR or a rate determined by reference to the daily simple SOFR, plus (ii) a spread based on our Senior Secured Net Leverage Ratio ranging from 2.50% to 3.25%. Upon entering into the Credit Agreement, we borrowed $101.0 million under the Revolving Credit Facility, of which $81.0 million is outstanding as of June 30, 2026. As of June 30, 2026, borrowings under the Revolving Credit Facility consisted entirely of term SOFR borrowings at an approximate all-in rate of 6.72%. A hypothetical 100 basis point increase in interest rates would increase interest expense over the next 12 months by approximately $0.8 million based on the balance outstanding for these borrowings as of June 30, 2026.
We have agreements with certain vendors and partners that operate in foreign jurisdictions. The more significant transactions are primarily denominated in the U.S. Dollar, subject to an annual adjustment based on changes in currency exchange rates.
Additionally, our accounts receivable are primarily concentrated with three large wholesalers of pharmaceutical products. In the event of non-performance or non-payment, there may be a material adverse impact on our financial condition, results of operations or net cash flow.
Item 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15(b) under the Exchange Act, our management, including our Chief Executive Officer and our Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. As defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, disclosure controls and procedures are controls and other procedures which are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2026.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Inherent Limitations on Effectiveness of Controls
Our management, including the Chief Executive Officer and our Chief Financial Officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.
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PART II — OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
For information related to Item 1. Legal Proceedings, refer to Note 17, Commitments and Contingencies, to our
condensed consolidated financial statements included herein.
Item 1A. RISK FACTORS
You should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in our 2025 Annual Report, which could materially affect our business, financial condition, cash flows or future results. Except as described below, there have been no material changes in our risk factors included in our 2025 Annual Report. The risks described in our 2025 Annual Report are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.
We may not realize the anticipated benefits of the divestiture of iovera°.
We may continue to incur costs or liabilities related to the divestiture of iovera°, including, among other things, obligations under a transition services agreement, indemnification provisions or other contractual commitments. The divestiture of iovera° also may divert management attention, result in higher-than-anticipated costs or disrupt our ongoing operations. Further, the divestiture may not achieve our anticipated strategic, operational or financial objectives, including allowing us to focus resources on our core business, improving our operating results and financial condition.
If we fail to realize the expected benefits of the divestiture of iovera°, do not receive any or all of the $70.0 million of potential revenue-based milestone payments or incur greater-than-expected costs or liabilities in connection with the divestiture, our business, financial condition, results of operations and cash flows could be materially adversely affected.
We may not receive some or all of the potential revenue-based milestone payments associated with the divestiture of iovera°.
There can be no assurance that any or all of the $70.0 million of potential revenue-based milestone payments (as outlined below) will ever be achieved or become payable to us. The achievement of the applicable milestones depends on numerous factors outside of our control, including, among other things, Zimmer’s commitment of financial and operational resources, clinical and regulatory outcomes, manufacturing capabilities, commercialization efforts, market acceptance, competitive dynamics, strategic decisions and other business priorities, among other things.
The potential revenue-based milestone payments associated with the divestiture of iovera° to Zimmer consist of:
•If net revenue from the sale of the current version of iovera° available for sale to end users as of the closing date of the iovera° divestiture transaction (the “Business Products”) during any of the five (5) calendar year periods commencing on January 1, 2027 through December 31, 2031 (each an “Applicable Milestone Period”) equals or exceeds $50.0 million, we will receive $18.5 million.
•If net revenue from the sale of the Business Products during any Applicable Milestone Period equals or exceeds $60.0 million, we will receive $23.5 million.
•If net revenue from the sale of the Business Products during any Applicable Milestone Period equals or exceeds $70.0 million, we will receive $28.0 million.
•If net revenue from the sale of the Business Products during any single year equals or exceeds the sum of any two or more milestones, then the highest applicable milestone payment shall be paid with respect to such year.
As a result, actions taken or not taken by Zimmer may delay, reduce or eliminate our ability to receive some or all of the potential revenue-based milestone payments, which expire on December 31, 2031 if not met.
For more information on the divestiture of iovera° to Zimmer, see Note 3, Assets and Liabilities Held for Sale, to our condensed consolidated financial statements included herein.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
Item 4. MINE SAFETY DISCLOSURES
Not applicable.
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Item 5. OTHER INFORMATION
Rule 10b5-1 Trading Plans
During the quarter ended June 30, 2026, no director or executive officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
Item 6. EXHIBITS
The exhibits listed below are filed or furnished as part of this report.

Exhibit Number |  | Description
2.1 |  | Stock and Asset Purchase Agreement by and between Pacira BioSciences, Inc., Pacira CryoTech, Inc. and Zimmer, Inc.* #
10.1 |  | Executive Employment Agreement, dated January 21, 2025, by and between Pacira Pharmaceuticals, Inc. and Brendan Teehan.* †
10.2 |  | Amended and Restated 2014 Employee Stock Purchase Plan.(1)†
31.1 |  | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a), as amended.*
31.2 |  | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a), as amended.*
32.1 |  | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
101 |  | The following materials from the Quarterly Report on Form 10-Q of Pacira BioSciences, Inc. for the quarter ended June 30, 2026, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Operations; (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss); (iv) the Condensed Consolidated Statements of Stockholders’ Equity; (v) the Condensed Consolidated Statements of Cash Flows; and (vi) the Condensed Notes to Consolidated Financial Statements.*
104 |  | Cover Page Interactive Data File (Formatted as Inline XBRL and contained in Exhibit 101).

* |  | Filed herewith.
** |  | Furnished herewith.
† |  | Denotes management contract or compensatory plan or arrangement.
# |  | Certain schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K under the Securities Exchange Act of 1934, as amended. The Registrant hereby undertakes to supplementally furnish copies of any omitted schedules to the Securities and Exchange Commission upon request.
(1) |  | Incorporated by reference to the Registrant’s Current Report on Form 8-K, filed on June 11, 2026.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

|  |  |  | PACIRA BIOSCIENCES, INC. (REGISTRANT)
Date: | August 4, 2026 | By: |  | /s/ FRANK D. LEE
|  |  |  | Frank D. Lee
|  |  |  | Chief Executive Officer and Director
|  |  |  | (Principal Executive Officer)
Date: | August 4, 2026 | By: |  | /s/ SHAWN M. CROSS
|  |  |  | Shawn M. Cross
|  |  |  | Chief Financial Officer
|  |  |  | (Principal Financial Officer)

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