Viatris is expanding its footprint in the non-opioid painkillers market with the acquisition of Pacira BioSciences, joining other drugmakers in a race to address a critical gap in public health.
Viatris said Thursday that it will pay $1.65 billion in cash, or $36.50 a share, for Pacira, representing a roughly 45% premium to Wednesday's closing price of $25.20.
Viatris said it plans to fund the Pacira acquisition primarily through excess cash, with the remainder coming from short-term borrowings. It expects the deal to have a minimal impact on its gross leverage ratio. The transaction is slated to close by year's end.
The transaction centers on Pacira's portfolio of non-opioid pain medications, notably Exparel and Zilretta, two extended-release therapies approved for specific postsurgical and joint conditions.
Viatris CEO Scott Smith expects these patented drugs will be "synergistic" with an anti-inflammation drug it is developing. He noted that the acquisition could position the company as "a leader in non-opioid pain management therapies" amid surging demand from patients and healthcare providers alike.
Shares of Pacira BioSciences surged 44% to $36.30 on Thursday, pacing toward their largest single-day percent increase on record, according to Dow Jones Market Data. Heading into the news, the stock had been trapped in a multiyear decline, and was further dragged down im August when the company cut its annual sales outlook. The deal appears to be a lifeline for the struggling biotech, whose market value hovered around $1 billion on Thursday.
Shares of Viatris, meanwhile, fell 2.2%, reflecting typical investor caution around short-term debt and integration costs. But looking past the initial market skepticism, the deal appears to be a calculated attempt to claim leadership in a field long starved for innovation.
In light of the opioid epidemic, one of the most severe public health crises in U.S. history, many drugmakers are exploring nonaddictive alternatives. However, these medications have proven difficult to bring to market, as development programs historically have been fraught with high failure rates.
As different patients experience and express chronic pain differently, broad-brush clinical trials often struggle to demonstrate consistent efficacy. Moreover, scientists still lack a complete understanding of the precise biological and mechanistic underpinnings of pain.
A major milestone occurred in January of last year, when Vertex Pharmaceuticals won approval for its Journavx pill, which was formerly one of the most-watched pipeline candidates in the biotech sector. The drug targets sodium channels in the peripheral nervous system to block pain signals before they reach the brain, becoming the first drug to be approved in this new class of pain-management medicines.
The world's largest drugmaker, Eli Lilly, has continued its push into the market despite past setbacks, most recently acquiring 4E Therapeutics in June to snap up its pipeline of oral MNK inhibitors, which can stop the generation of pain signals.
Viatris was founded in 2020 through the merger of Pfizer's Upjohn division and generic drug manufacturer Mylan. Its most notable products today include brand-name EpiPens and the cholesterol-regulating medication Lipitor.
The company also manufactures standard generic meloxicam tablets to treat chronic inflammation. Its novel fast-acting formulation is currently under review, with regulators poised to decide by Dec. 27 whether or not to approve it.
Heading into Thursday's session, Viatris stock had risen over 40% in 2026, outpacing a 17% gain in the iShares U.S. Pharmaceuticals exchange-traded fund. The approval of fast-acting meloxicam could provide yet another catalyst.