FDA rejects Pacira's application for expanded use of pain drug

(Reuters) - The U.S. Food and Drug Administration rejected Pacira Pharmaceuticals Inc's application to expand the use of its post-surgery pain drug, Exparel, sending the company's stock down more than 16 percent on Monday. Exparel is currently injected directly into tissue at the site of an operation, a technique known as infiltration. Pacira applied to expand its use as a nerve-numbing injection, or nerve block, in March last year. Nerve blocks work by introducing a local anesthetic close to a nerve, allowing the drug to control pain in a specific region of the body, such as the upper arm, thigh or lower leg. The FDA's rejection could delay approval for the nerve block indication by at least a year, Canaccord Genuity analyst Corey Davis said. Exparel, which was approved in April 2012 for post-surgical pain, generated 95 percent of Pacira's nearly $197.6 million in revenue last year. The drug's main indication is still the company's primary revenue driver, Pacira said. Pacira said last week that it expected Exparel sales to rise to $310-$330 million in 2015, with about 10 percent of the projected revenue coming from the expanded use of the drug. The company said on Monday that it would work with the FDA to secure approval for the new indication, allowing Exparel to be used in a wider range of post-operative patients. The drug combines a local anesthetic, bupivacaine, with the company's DepoFoam technology, a drug delivery system that releases the medicine over a period of time. Pacira's stock was down 15 percent on Monday afternoon and was the biggest drag on the Nasdaq Biotechnology Index. (Reporting by Amrutha Penumudi in Bengaluru; Editing by Savio D'Souza and Simon Jennings)