Earnings & Outlook · PCRX · VTRS
Pacira won back $28 million. A court has reopened the royalty bill.
The appeal affects one production process for its main medicine. The financial effect remains unquantified as a cash takeover moves toward completion.
Pacira's victory in a dispute over its biggest medicine has been partly reversed. The company says a federal appeals court ruled on November 6 that it owes royalties on EXPAREL made using its 200-liter manufacturing process.
That brings a cost back into question after Pacira received $28.3 million from the Research Development Foundation in July 2025. The setback arrives while Viatris is seeking to buy the drugmaker for $36.50 a share in cash.
One manufacturing process changes the outcome
The dispute concerns payments under an agreement with the foundation, known as RDF. Pacira had argued that its royalty obligations ended in December 2021. Lower-court decisions supported its position, including for an enhanced, larger-scale manufacturing process.
According to Pacira's November 12 filing, the Ninth Circuit reversed the decision in part and directed the district court to enter judgment for RDF on EXPAREL made with the 200-liter process.
The 45-liter portion of the case has a different outcome: the appeals court sent it back for a recalculation of the interest RDF owes Pacira. The filing does not say the entire $28.3 million payment must be returned, and it does not put a number on the new royalty liability.
The product behind four-fifths of sales
EXPAREL generated about 81% of Pacira's third-quarter revenue. Sales of the postsurgical pain medicine were $142.5 million out of $176.7 million in total revenue.
That makes the royalty outcome relevant to the economics of the main business. The company has not disclosed in this update how much of those sales came from the affected manufacturing process, so the total EXPAREL sales figure does not establish the royalty bill.
EXPAREL sales grew 2% from a year earlier, while total revenue fell 2%. Pacira sold its iovera business in July, removing most of that product's quarterly sales from the comparison.
Research by Ticker Byline shows that the appeal affects a process Pacira still reported using in its latest quarterly filing. The company said it had decommissioned the 45-liter EXPAREL suite in San Diego in 2025, while its 200-liter suite at the same facility continued operating.
What last year's refund actually contained
The $28.3 million cash receipt included $23.1 million of royalties paid under protest and $5.2 million of statutory interest.
Pacira's November 5 quarterly report still described the consolidated appeal as pending. The following day's ruling changed that position, and the November 12 filing disclosed the partial reversal. Pacira says it is evaluating its legal options.
A legal setback inside a pending cash takeover
The latest tender-offer amendments, filed November 12, continue to state a $36.50-per-share cash price, subject to the deal's terms and conditions. They do not announce a lower bid or termination because of the royalty ruling.
For shareholders, the question now combines the cost attached to EXPAREL with completion of the sale to Viatris. Pacira withdrew its 2026 financial guidance on November 5 while the acquisition is pending. Our analysis of Viatris' results and profit outlook covers the buyer's own operating pressures.
The next financial detail to watch is the amount owed following the partial reversal and how it is recognized in Pacira's accounts. The Pacira company profile follows the case, current results and the pending takeover.