#None #Pacira BioSciences #DOMA Perpetual #shareholder activism

A Wake-Up Call for Pacira Biosciences Shareholders

In a bold move, Doma Perpetual Capital Management has made headlines with a letter directed at the shareholders of Pacira Biosciences, highlighting the significant performance shortcomings overseen by CEO Frank Lee and his Board. Holding approximately 7.5% of Pacira’s outstanding shares, Doma asserts that under Lee’s leadership, the company has suffered from persistent underperformance, leaving shareholders to question the management’s direction.

Financial Deterioration

Doma’s letter points out the stark realities regarding Pacira’s total shareholder returns (TRS), which are alarmingly negative over various periods. Year-to-date returns stand at -11%, while returns over the past three years plummet to -44%. Even more concerning is the staggering -64% collapse over the last five years. Such figures highlight a disastrous trajectory that shareholders cannot afford to ignore. Doma argues that instead of confronting these issues, the Board and management continue to enrich themselves with lucrative payouts that amount to tens of millions, further alienating the interests of ordinary shareholders.

Questionable Strategic Decisions

At the core of Doma’s concerns lies Pacira’s flagship product, EXPAREL. Doma contends that the Board's handling of litigation regarding EXPAREL’s patents has been grossly negligent, posing an existential risk to the company’s future. The letter raises the critical question: if the Board fails to navigate these patent risks, could shareholders lose everything?

Doma pushes that Pacira has historically overextended itself in acquisitions, attempting to diversify its focus away from EXPAREL. This strategy appears flawed, given that EXPAREL still constitutes more than 80% of the business. The invalidation of a key EXPAREL patent in 2024 added urgency to these claims, showcasing management's inability to foresee potential pitfalls.

A Call to Action for Shareholders

Doma is not merely pointing fingers; they advocate for a proactive approach. They propose that shareholders should take charge of the company’s direction by having a say in any strategic alternatives, including a potential sale of the business. This involves conducting a careful, Board-supervised exploration of market options.

Doma is urging shareholders to reject any narrative that undermines their role by voting for Doma's independent nominees at an upcoming annual meeting. They argue that a well-resourced acquirer could better mitigate risks and leverage EXPAREL's potential than the current management, effectively safeguarding shareholder interests.

Risks and Uncertainties

The current uncertainties surrounding EXPAREL's patent strategy cannot be overstated. Doma emphasizes that previous court losses bring foreboding implications for the future, and without robust contingency plans in the face of litigation, shareholders are left vulnerable. The absence of a comprehensive risk management approach raises alarm bells about the effectiveness of current leadership.

Moreover, Doma argues that the **