Key Takeaways
Activist investor DOMA Perpetual Capital Management has launched a public campaign against Pacira BioSciences (PCRX), citing the stock’s 64% five-year decline and urging the company to explore a sale. DOMA, which holds a 7.5% stake in the drugmaker, nominated three directors to the board ahead of a shareholder vote.
"Why would shareholders vote to continue this unrelenting lack of total return?" DOMA asked in a public letter to Pacira shareholders, highlighting years of what it called "gross and persistent underperformance" while management collected tens of millions of dollars in compensation.
The activist laid out a series of negative returns, noting the stock has fallen 11% year-to-date, 28% since Frank Lee became CEO in January 2024, and 64% over the past five years. In contrast, DOMA stated its nominees would have a single guiding principle: "to do what is best for all of the Company's shareholders."
The dispute centers on Pacira's core asset, the non-opioid pain treatment EXPAREL, which accounts for over 80% of the company's business. DOMA argues the board has failed to manage the risk of patent challenges, calling the situation "gross negligence." The activist pointed to an August 2024 court decision that invalidated a key patent and a subsequent settlement that allows for generic entry, arguing the board is now betting the company's future on a new round of litigation without a contingency plan.
DOMA dismissed Pacira's "5x30 plan" as an "illogical and financially unsound strategy" that fails to address the immediate legal risks. Instead of pursuing what it calls "bet the farm" litigation, DOMA is pushing for a board-supervised process to explore strategic alternatives, including a sale. The fund argues a larger company with more resources could better defend EXPAREL's patents and expand its market reach.
The activist fund is seeking to install its three nominees—Christopher Dennis, MD, Oliver Benton "Ben" Curtis III, and Eric de Armas—at the company's annual meeting on June 9, 2026. In a letter, Dr. Dennis and Mr. Curtis defended their qualifications, arguing their respective experience in addiction medicine and regulatory law are directly relevant to Pacira's challenges. They pushed back on the board's characterization of their strategy as a "fire sale," stating a board's duty is to "test every credible path to value."
The escalating proxy battle creates significant uncertainty for investors. The outcome of the June 9 shareholder vote will determine whether Pacira continues with its current strategy under existing leadership or is forced to consider a sale as demanded by its activist shareholder.
This article is for informational purposes only and does not constitute investment advice.
