Pacira BioSciences Streamlines Manufacturing Operations, Lays Off 8% of Workforce

Pacira BioSciences, a leading non-opioid pain management company, has announced significant changes to its manufacturing operations, including the decommissioning of a long-standing production facility and a reduction in its workforce. The move comes as part of the company's broader strategy to optimize its production capabilities and improve cost efficiency.

Manufacturing Upgrade and Facility Closure

Pacira has made the decision to retire its 45-liter manufacturing facility in San Diego, which has been producing commercial supply of the company's flagship product, Exparel, since 2014. This closure follows years of investment in upgrading the company's manufacturing capabilities, resulting in the successful implementation of larger-scale 200-liter production suites in both San Diego and Swindon, U.K.

CEO Frank Lee explained the rationale behind this decision in a letter to employees, stating, "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. For the first time in our history, we're able to maintain optimal inventory levels to meet the growing demand for Exparel."

The new 200-liter facilities, which began commercial production in 2024 and 2021 respectively, offer a significant increase in production capacity. According to the company, these larger manufacturing suites can produce bulk Exparel at volumes approximately four times greater than the 45-liter process, providing ample capacity to meet growing demand while improving gross margins through a more favorable cost structure and manufacturing yields.

Workforce Reduction and Financial Impact

As a result of the facility closure, Pacira is laying off 71 employees, representing about 8% of the company's total workforce. The affected positions are primarily located at the company's science center campus in San Diego.

Pacira expects this headcount reduction to result in annual savings of approximately $13 million in operating expenses. The company views this move as a necessary step in its efforts to improve operational efficiency and support its long-term growth objectives.

Strategic Outlook and Future Plans

The manufacturing changes and workforce reduction are part of Pacira's recently announced five-year strategic plan, which aims to position the company as a leader in musculoskeletal pain management and related areas by 2030. Key objectives of this plan include:

1. Achieving double-digit compound annual revenue growth
2. Improving gross margin by five percentage points over 2024 levels
3. Expanding the company's clinical pipeline to include at least five programs in development by 2030
4. Establishing five R&D or commercial partnerships

Pacira believes that recent legislative developments, such as the NOPAIN Act, which promotes access to non-opioid pain management options, will help drive growth for its key products, Exparel and iovera.

Despite the workforce reduction, CEO Frank Lee emphasized the company's ongoing commitment to its remaining employees, stating, "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."