After years of investment to upgrade its manufacturing capabilities, Pacira BioSciences figures it’s time to retire a facility that has been running for more than a decade.
In turn, the California drugmaker is laying off 71 employees, or about 8% of the company’s workforce, at its science center campus in San Diego. Pacira expects the headcount reduction will save about $13 million in operating expenses per year.
The 45-liter facility that’s being decommissioned has been producing commercial supply of Pacira’s non-opioid pain drug Exparel since 2014, CEO Frank Lee noted in a letter to employees about the layoffs, according to a securities filing.
“This decision reflects the progress we’ve made in recent years in bringing our enhanced, large-scale 200-liter manufacturing process online in both San Diego and Swindon, [U.K.],” the CEO said in the July 10 letter. “For the first time in our history, we’re able to maintain optimal inventory levels to meet the growing demand for Exparel.”
The company began commercial production at the two 200-liter suites in San Diego and Swindon in 2024 and 2021, respectively. The two facilities can produce bulk Exparel at volumes that are about four-fold greater than the 45-liter process.
“The company believes these larger manufacturing suites provide ample capacity for meeting the growing demand and improving gross margins for Exparel through a meaningfully more favorable cost structure and manufacturing yields versus the 45-liter process,” the company said in its securities filing.
First approved by the FDA in 2011 for postsurgical pain management, Exparel has been Pacira’s most important product, with the drug’s $549 million in 2024 sales making up 78% of the company’s total revenues that year. The company also sells osteoarthritis knee pain treatment Zilretta, which it obtained through its $450 million acquisition of Flexion Therapeutics. Iovera, a handheld device for delivering controlled doses of cold temperature to manage pain, rounds out Pacira’s commercial portfolio.
“We also remain deeply committed to all our colleagues at Science Center and Swindon who will continue to ensure we deliver Exparel, iovera°, and Zilretta to patients in the years ahead,” Lee said in the letter.
Pacira is making the efficiency move after the company in January embarked on a new five-year plan to become a biopharma leader in “musculoskeletal pain and adjacencies.” The company laid out five objectives it aims to meet by 2030, including growing revenues by double digits on a compounded annual growth rate, compared with 4% in 2024 versus 2023. The company is also looking to improve gross margin by five percentage points over 2024. Pacira believes that the recent NOPAIN Act, which aims to promote access to nonopioid pain management options, will help drive growth for Exparel and iovera.
Pacira currently lists one clinical candidate, gene therapy enekinragene inzadenovec (PCRX-201), which is in phase 1 testing in osteoarthritis of the knee. The U.S. company took full control of the interleukin-1 receptor antagonist gene therapy after acquiring the remaining 81% stake of Germany’s GQ Bio Therapeutics for about $32 million in February.
Under the five-year plan, Pacira intends to have at least five programs in clinical development by 2030 and aims to establish five R&D or commercial partnerships.