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No pain and a gain
PARSIPPANY, N.J. & FREMONT, Calif.—Pacira Pharmaceuticals Inc. is moving to expand its portfolio and its foothold in the pain alleviation market with the recent announcement of its pending acquisition of medical technology company MyoScience Inc. Following the completion of the deal, Pacira will change its name to Pacira BioSciences to represent its more diversified focus, while MyoScience will become a wholly owned subsidiary and will be renamed Pacira CryoTech Inc.
Per the agreement, Pacira will pay $120 million in an initial payment, and MyoScience’s shareholders stand to receive up to an additional $100 million in contingent payments if specified regulatory and commercial milestones are met. Pacira expects the transaction to close this April—subject to expiration or termination of the Hart-Scott-Rodino Act and other customary closing conditions—and to be accretive to net income starting in the first half of 2020 and increasingly accretive from then on.
“Like Pacira, MyoScience is committed to fighting our nation’s opioid crisis through innovative, opioid-free pain treatments,” David Stack, chairman and CEO of Pacira, said in a conference call about the deal. “We have a strong sense of purpose for our combined assets as we address the opioid epidemic, the public health emergency and we fulfill the mandate from Governor Christie’s opioid commission and the Health and Human Services taskforce that non-opioid options be available to all patients—in-patients and out-patients—for acute pain.”
The main draw for Pacira in this deal is MyoScience’s ioveraº system, which is a non-opioid treatment that uses cryoanalgesia—intensely focused cold therapy targeted at a specific nerve to block its ability to transmit pain signals—to alleviate pain. Relief is immediate, according to a press release, and can last up to three months or longer while the nerve regenerates.
“The ioveraº precise cold treatment delivers a reversible nerve block through a process called Wallerian degeneration. Importantly, the degeneration only involves the nerve axon and its surrounding myelin sheath,” Ron Ellis, senior vice president of strategy and corporate development, explained in a conference call. “The endoneurium and other surrounding tissue are unaffected by the ioveraº focused cold therapy. The results are safe, effective pain relief for three or more months as the signal is not able to conduct along the sensory nerves until the nerve axon is regenerated, which occurs at a rate of 1 to 2 millimeters per day. So we have a predictable indicator of when nerve function will be restored.”
MyoScience has tested ioveraº in more than 20,000 procedures, and in cases of osteoarthritis of the knee or knee replacement surgery, it has provided decreased knee pain and stiffness, improved physical function, fewer opioid prescriptions and faster recovery.
Pacira has its own pain relief product in EXPAREL (bupivacaine liposome injectable suspension), which uses its proprietary DepoFoam to deliver drugs. DepoFoam encapsulates drugs without affecting their molecular structure and releases them over a period of time.
“We are pleased to enter into this transaction and are confident that Pacira is the ideal fit to build the ioveraº franchise, given their commitment to and proven track record of expanding patient access to non-opioid options,” remarked Timothy Still, president and CEO of MyoScience. “This acquisition comes at a time when opioid abuse and addiction has reached epidemic proportions and alternative approaches to pain management are being mandated. We believe adding ioveraº to EXPAREL-based opioid-sparing protocols will help create an opioid-free perioperative and postoperative experience for many patients.”
On the analyst side of things, some feel that while the deal itself is logical, the price might not be.
“We believe Pacira’s acquisition of Myoscience makes sense, given the opportunity to synergize Iovera and Exparel in the post-surgical pain market while leveraging existing commercial infrastructure,” commented Dewey Steadman, Canaccord Genuity pharma analyst. “That said, we’re a bit disappointed the company didn’t provide many financial details to justify the purchase price, but we think over time the acquisition could shift investor focus away from Exparel and the looming threat of competition later this year … Overall, we think there’s a lot of potential for Iovera in postoperative settings and beyond, but given the lack of financial details we are taking a wait-and-see approach to this transaction.”