Financial Analysis

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 an …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

DEBT The carrying value of the Companys outstanding debt is summarized as follows (in thousands): March 31, December 31, 2026 2025 2.125% Convertible senior notes due May 2029 $ 281,656 $ 281,189 Revolving Credit Facility 86,000 91,000 Total $ 367,656 $ 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): March 31, December 31, 2026 2025 2.125% convertible senior notes due May 2029 $ 287,500 $ 287,500 Deferred financing costs (5,844) (6,311) Total debt, net of deferred financing costs $ 281,656 $ 281,189 As of March 31, 2026, the 2029 Notes had a market price of $967 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 Comp …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following table represents disaggregated net product sales in the periods presented as follows (in thousands): Three Months Ended March 31, 2026 2025 Net product sales: EXPAREL $ 143,274 $ 136,529 ZILRETTA 26,767 23,338 iovera 6,176 5,123 Bupivacaine liposome injectable suspension 1,159 2,604 Total net product sales $ 177,376 $ 167,594 …

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GOODWILL AND INTANGIBLE ASSETS Goodwill The Companys goodwill arose from the GQ Bio Acquisition in February 2025. As of March 31, 2026 and December 31, 2025, the goodwill balance was $19.8 million and $20.2 million, respectively. The change in the goodwill balance from December 31, 2025 was due to $0.4 million in foreign currency translation adjustments. The Company previously had goodwill resulting from the acquisition of Pacira Pharmaceuticals, Inc. (the Companys California operating subsidiary) from SkyePharma Holding, Inc. (now a subsidiary of Vectura Group plc, a subsidiary of Molex Asia Holdings Ltd.) in 2007, the MyoScience Acquisition in 2019 and the Flexion Acquisition in 2021. Accumulated goodwill impairment charges through March 31, 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 are summarized as follows (dollar amounts in thousands): March 31, 2026 Gross Carrying Value Accumulated Amortization Intangible Assets, Net Weighted-Average Useful Lives Developed technologies $ 590,000 $ (270,533) $ 319,467 10 years, 5 months Customer relationships 90 (63) 27 10 years Total finite-lived intangible assets, net 590,090 (270,596) 319,494 Acquired IPR&D (1) 33,733 33,733 Total intangible assets, net $ 62 …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

INCOME TAXES Income before income taxes and income tax expense are as follows (dollar amounts in thousands): Three Months Ended March 31, 2026 2025 Income before income taxes: Domestic $ 4,167 $ 10,673 Foreign 831 (1,967) Total income before income taxes $ 4,998 $ 8,706 Income tax expense $ 2,082 $ 3,894 Effective tax rate 42 % 45 % The Companys 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 Companys effective tax rate for the three months ended March 31, 2026 was primarily impacted by costs related to non-deductible stock-based compensation and non-deductible executive compensation, partially offset by tax credits. The Companys effective tax rate for the three months ended March 31, 2025 was primarily impacted by costs related to non-deductible stock-based compensation, non-deductible executive compensation and a non-U.S. valuation allowance, partially offset by tax credits. As of both March 31, 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 March 31, 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 March 31, 2026 and December 31, 2025, the C …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

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. 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 Companys European offices were assumed and include an R&D 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. 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 March 31, 2026 2025 Fixed lease costs $ 3,135 $ 3,302 Variable lease costs 560 539 Sublease income (57) Total $ 3,695 $ 3,784 Supplemental cash flow information related to operating leases is as follows (in thousands): Three Months Ended March 31, 2026 2025 Cash paid for operating lease liabilities, net …

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Recent Accounting Pronouncements Not Adopted as of March 31, 2026 In November 2024, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2024-03, Income StatementReporting Comprehensive IncomeExpense 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 ASUs 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, IntangiblesGoodwill and OtherInternal-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 …

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REVENUE Revenue from Contracts with Customers The Companys net product sales are primarily within the U.S. and consist of EXPAREL, ZILRETTA, iovera and sales of bupivacaine liposome injectable suspension for veterinary use. Royalty revenues are related to a collaborative licensing agreement from the sale of the Companys bupivacaine liposome injectable suspension for veterinary use. 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 …

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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 Officerwho is the Companys chief operating decision maker, or CODMmanages 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 Companys financial results. The table below reconciles the significant expense categories provided to the CODM to the Companys expenses as disclosed under GAAP (in thousands): Three Months Ended March 31, 2026 2025 Revenues $ 177,376 $ 168,923 Less: Adjusted cost of goods sold (1) 34,770 32,590 Adjusted research and development (1) 25,362 23,101 Adjusted selling and marketing (1) 58,166 55,571 Adjusted general and administrative (1) 25,712 20,609 Stock-based compensation (1) 13,539 14,553 Amortization of ac …

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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 Companys Annual Report on Form 10-K for the year ended December 31, 2025 (the 2025 Annual Report). The condensed consolidated financial statements at March 31, 2026, and for the three-month periods ended March 31, 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 Companys 2025 Annual Report. The accounts of wholly-owned subsidiaries are included in the condensed consolidated financial state …

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STOCKHOLDERS EQUITY Accumulated Other Comprehensive Income The following tables illustrate the changes in the balances of the Companys 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) (57) (57) Foreign currency translation adjustments (815) (815) Balance at March 31, 2026 $ 40 $ 3,415 $ 3,455 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) (86) (86) Foreign currency translation adjustments 1,094 1,094 Balance at March 31, 2025 $ 104 $ 1,247 $ 1,351 (1) Net of a nominal tax benefit for both the three months ended March 31, 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 managements 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. …

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