Pacira Pharmaceuticals: 4 Different Insiders Have Sold Shares This Month

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 |  About: Pacira Pharmaceuticals, Inc. (PCRX), Includes: KMB
by: Markus Aarnio

Summary

4 insiders sold Pacira stock within one month.

The stock was not purchased by any insiders in the month of intensive selling.

3 of these 4 insiders decreased their holdings by more than 10%.

Pacira Pharmaceuticals (NASDAQ:PCRX) develops, commercializes, and manufactures pharmaceutical products primarily for use in hospitals and ambulatory surgery centers worldwide.

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Insider selling during the last 30 days

Here is a table of Pacira's insider activity during the last 30 days.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
David Stack CEO May 9 25,000 Yes 19,804 shares + 170,695 options 11.6%
Laura Brege Director May 9 10,000 Yes 0 shares + 12,000 options 45.5%
James Scibetta CFO May 8 15,000 Yes 5,000 shares + 17,989 options 39.5%
Andreas Wicki Director May 6-7 44,780 Yes 1,622,527 shares 2.7%
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There have been 94,780 shares sold by insiders during the last 30 days. All these shares were sold pursuant to a Rule 10b5-1 plan. More details about the Rule 10b5-1 trading plan can be found from this link.

Insider selling by calendar month

Here is a table of Pacira's insider activity by calendar month.

Month Insider selling / shares Insider buying / shares
May 2014 94,780 0
April 2014 0 0
March 2014 25,887 0
February 2014 0 0
January 2014 0 0
December 2013 27,500 0
November 2013 50,000 0
October 2013 20,000 0
September 2013 55,283 1,000
August 2013 14,700 0
July 2013 458,223 0
June 2013 483,054 0
May 2013 329,313 853
April 2013 227,750 0
March 2013 2,870,886 0
February 2013 0 0
January 2013 500,000 0
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There have been 5,157,376 shares sold, and there have been 1,853 shares purchased by insiders since January 2013.

Financials

Pacira reported the first-quarter financial results on May 1 with the following highlights:

Revenue $36.7 million
Net loss $11.5 million
Cash $64.6 million
Debt $101.1 million
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The four insiders sold their shares after these results.

In April, Pacira raised net proceeds of $110.4 million in a public offering.

Outlook

Pacira expects to be profitable on a non-GAAP reported basis no later than the second half of this year.

Pipeline and upcoming milestones

Pacira's product portfolio consists of the following products or drug candidates.

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(Source: Pacira)

Pacira expects to submit a supplemental New Drug Application for a nerve block indication (Exparel) in the second quarter of 2014.

Competition

Pacira's competitors include Kimberly-Clark Corporation (NYSE:KMB) with I-Flow. Here is a table comparing these two companies.

Company PCRX KMB
Market Cap: 2.62B 41.75B
Employees: 308 57,000
Qtrly Rev Growth (yoy): 2.16 -0.01
Revenue: 110.63M 21.11B
Gross Margin: 0.26 0.34
EBITDA: -37.12M 4.22B
Operating Margin: -0.40 0.16
Net Income: -52.25M 2.15B
EPS: -1.56 5.58
P/E: N/A 19.86
PEG (5 yr expected): N/A 2.63
P/S: 24.35 1.98
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Pacira has a lower gross margin than Kimberly-Clark. In Kimberly-Clark, there have been 123,291 shares sold, and there have been zero shares purchased by insiders this year. Kimberly-Clark has also seen intensive insider selling during the last 30 days.

Conclusion

There have been four different insiders selling Pacira, and there have not been any insiders buying Pacira during the last 30 days. Three of these four insiders decreased their holdings by more than 10%. Pacira has an insider ownership of 13.37%.

Before going short Pacira, I would like to get a bearish confirmation from the Point & Figure chart. The four main reasons for the proposed short entry are a relatively low gross margin, high P/S ratio, negative earnings, and the intensive insider-selling activity.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.