Pacira Pharmaceuticals Inc (NASDAQ:PCRX) started 2017 strong, pre-announcing a fourth-quarter of 2017 beat coupled with full-year results that outclassed consensus expectations. The biotech firm has had quite a week of volatility, with shares that sunk 7% yesterday experiencing a nice recovery today, rallying forward 11% following the pre-announcement.

Though top analyst Irina Rivkind Koffler at Mizuho notes the reason for the beat remains “unclear” when considering “actual volume growth or stocking,” she predicted “a relief rally in the stock after yesterday’s sell-off.” In reaction, the analyst reiterates a Buy rating on PCRX with a $41 price target, which represents a just under 9% increase from where the shares last closed.

For the fourth quarter of 2016, the firm’s Exparel sales accelerated 6.3% year-over-year to reach $71.4 million, topping FactSet consensus of $69.8 million as well as the analyst’s $66.2 million project. Additionally, these sales outperformed the prior implied guidance range calling for $68.5 to $73.5 million.

Total sales rose 5.1% year-over-year to $72.9 million for the quarter, just ahead of consensus of $72.6 million, and steadily topping Koffler’s projection of $68.4 million. Moreover, PCRX revealed Exparel sales for the financial year of 2016 increased 10.8% year-over-year to $265.8 million, compared to FactSet consensus of $264.5 million and the analyst’s forecast of $260.5 million. Full year sales for the firm for the financial year of 2016 saw an 11% year-over-year surge to $276.4 million, slightly ahead of consensus of $276 million and outperforming the analyst’s $271.9 million estimate.

Koffler opines, “We currently have below-consensus expectations for 2017 Exparel growth ($289.8M vs. $301.8M consensus) since we don’t think the company will be able to drive significant 2017 volume uptake ahead of a label revision for nerve block and separate publication/dissemination of its TKA data (which may not happen until late 2017). However, Pacira has been able to establish itself as the market leader in non-opioid post-operative pain control (with a challenging and expensive hospital product) and we continue to view it as a likely takeout target after its 1Q:17 data releases in nerve block. The company noted that it is encountering strong partnership interest in its press release, which we believe confirms our view.”

Moving forward, “We think that Pacira could get acquired for its established niche in the hospital due to the scarcity value of large brands in this setting and potential operational leverage for the right strategic buyer,” Koffler concludes, noting key competitive advantage over rivals Heron Therapeutics Inc (NASDAQ:HRTX) and Innocoll Holdings PLC (NASDAQ:INNL).

With HRTX far from a launch date for its bupivacaine and meloxicam combination for the next coming years and INNL dealing with the aftermath of the FDA’s refusal to accept its NDA for its bupivacaine collagen-matrix implant Xaracoll, the analyst is betting on the success of PCRX’s pipeline.

Irina Rivkind Koffler has a very good TipRanks score with a top five-star standing and a high ranking of #77 out of 4,348 analysts. Koffler upholds a 52% success rate and garners 19.5% in her annual returns. However, when recommending PCRX, Koffler loses 8.7% in average profits on the stock.

TipRanks analytics demonstrate PCRX as a Buy. Based on 11 analysts polled by TipRanks in the last 3 months, 5 rate a Buy on PCRX stock, while 6 maintain a Hold. The 12-month average price target stands at $47.13, marking a nearly 28% upside from where the stock is currently trading.

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