Pacira soars 44% as Viatris agrees to buy biotech to boost non-opioid pain portfolio

Shares of Pacira BioSciences, a maker of non-opioid painkillers, soared 44% on Thursday to their highest level in more than three years. The company announced that rival Viatris would acquire it at a premium. Viatris was created just six years ago through the merger of pharmaceutical company Mylan and Pfizer’s Upjohn division, from which it obtained a portfolio of drugs, including Viagra.

Pacira shares closed Thursday at $36.39 apiece, their highest level since mid-2023. The rally began after the biotech announced that Viatris would acquire it. Viatris will launch a tender offer for Pacira shares at $36.50 per share, representing a premium of almost 45% to Wednesday’s closing price, the day before the deal was announced. The transaction values Pacira at approximately $1.65 billion.

The boards of both companies unanimously approved the transaction, according to the press release. The deal is subject to a majority of Pacira’s outstanding shares being tendered. The companies expect to complete the transaction by the end of the year, after which Pacira will become a wholly owned subsidiary of Viatris, and its stock will cease trading on the Nasdaq.

The acquisition will add two non-opioid painkillers, EXPAREL and ZILRETTA, to the Viatris portfolio and position the company as a leader in non-opioid pain management therapies, according to the press release.

Both drugs are already marketed in the U.S. and generate revenue for Pacira. For the last 12 months ended June 30, the company reported approximately $746 million in revenue and approximately $177 million in adjusted earnings before interest, taxes, depreciation, and amortization. Viatris, which has its own non-opioid painkiller, meloxicam, plans to expand the products’ reach across select international markets, the press release states.

Following news of the Viatris-Pacira deal, at least two Wall Street analysts, from Needham and Jefferies, dropped their "buy" recommendations on Pacira and now advise "hold." JPMorgan, meanwhile, upgraded the stock to “neutral” from “underweight.”

“Hold” is now the most common recommendation among analysts covering Pacira, with seven such ratings versus two “buy” calls, according to MarketWatch data. A month ago, the stock had just three “hold” ratings versus five “buy” calls and one “sell.” The average target price is $34.21 per share, roughly in line with the Viatris offer.