Key Takeaways:
Activist investor DOMA Perpetual Capital Management, which owns about 7.5% of Pacira BioSciences Inc., is urging shareholders to vote against the company's board nominees at the June 9 annual meeting, citing a decade of value destruction and what it calls misleading claims about patent protection for the company's flagship drug.
"Management was unprepared for its first patent defeat in the lower court," DOMA said in a letter to shareholders Wednesday, pointing to comments from Pacira's chief legal officer who had asserted generic competitors would need to overcome all of the company's patents. Days later, a court ruled against Pacira on the key '495 patent, and the company later settled, conceding future revenue from EXPAREL, which accounts for about 80% of total revenue.
Pacira's stock has declined across every meaningful period, according to DOMA. Shares are down 10% year-to-date, 9% over one year, 41% over three years, 65% over five years and 46% over 10 years. Since Frank D. Lee became chief executive officer in January 2024, the stock has fallen 27%. The company's market capitalization stood at roughly $2.5 billion as of Wednesday's close.
Pacira responded Thursday with a letter of its own, calling the proxy contest "distracting and misinformed." The company said its 5x30 strategy — aimed at growing its commercial business and diversifying its portfolio by 2030 — is working, with record revenue of $726.4 million in 2025 and a 31% stock gain since the plan's launch. Pacira also highlighted a favorable settlement that gives it full EXPAREL exclusivity into 2030 with a gradual transition through 2039.
DOMA is nominating three candidates — Christopher Dennis, Oliver Benton Curtis III and Eric de Armas — to replace Pacira's nominees: former New Jersey Governor Christopher Christie, Samit Hirawat and Thomas Wiggans. The activist contends the board has refused to explore a sale because directors do not want to lose their jobs, putting their interests ahead of shareholders. Pacira said it met with DOMA 17 times since September 2023 and interviewed two of its three nominees, determining none "possess the knowledge and experience necessary to be value additive."
The proxy fight comes as Pacira faces questions about its intellectual property strategy. The company has expanded EXPAREL's patent estate to 21 Orange-Book listed patents across two families, with exclusivity through the mid-2040s. But DOMA argues that if additional generic competition emerges and forces further concessions on EXPAREL revenue, the 5x30 plan — which relies on capital from the drug — would become impossible to achieve.
A larger pharmaceutical company with more resources would be better positioned to defend against generic threats and could extract greater value from EXPAREL through distribution and cost synergies, DOMA said. The activist is not advocating a "fire sale" but wants a disciplined process to test market value. Pacira's board has hired Goldman Sachs & Co. as financial adviser and Perkins Coie as legal counsel.
The outcome of the June 9 vote will determine whether Pacira's current board retains control or whether DOMA's nominees gain seats, potentially opening the door to a sale process. Shareholders must decide between the company's claim of renewed momentum and the activist's argument that only new leadership can reverse a decade of decline.
This article is for informational purposes only and does not constitute investment advice.
