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Heron Therapeutics Announces Second Quarter 2023 Financial Results and Provides Corporate Updates

August 14, 2023 | Last Trade: US$1.58 0.02 -1.25
  • Company is well capitalized after signing $50 million working capital credit facility and recent $30 million equity raise
  • Favorable outcome at Markman hearing in pending CINVANTI® ANDA patent litigation
  • New management team in place
  • Reiterating full-year net product sales guidance for the oncology care franchise of $99-$103 million

SAN DIEGO, Aug. 14, 2023 /PRNewswire/ -- Heron Therapeutics, Inc. (Nasdaq: HRTX) ("Heron" or the "Company"), a commercial-stage biotechnology company focused on improving the lives of patients by developing and commercializing therapeutic innovations that improve medical care, today announced financial results for the three and six months ended June 30, 2023 and highlighted recent corporate updates.

"During the second quarter of 2023, the new executive management team has been focused on resizing the business and recently announced a cost reduction program that is anticipated to save the Company approximately $75 million in cash spend through 2025," said Craig Collard, Chief Executive Officer of Heron. "We are in the early stages of revamping Heron into a commercially focused company with efficient operations. As we move through the remainder of 2023, our team is focused on commercial execution and we look forward to updating you on those efforts in the near-term.  In addition to the cost-cutting, we were able to bolster the balance sheet by completing a $30 million equity financing with some of our largest shareholders, as well as closing on a $50 million working capital facility. Based on our current operational plan, we expect that this will provide the Company with enough capital to achieve profitability."

Recent Corporate Updates

  • Financings:
    • In July 2023, Heron completed a private placement equity financing with estimated net proceeds from the sale of Company common stock and pre-funded warrants of $29.7 million.
    • In August 2023, Heron entered into a working capital facility, providing for an aggregate gross principal amount of up to $50.0 million in working capital for the Company, subject to certain terms and conditions, with approximately $24.5 million in net proceeds drawn at closing.

Acute Care Franchise

  • Acute Care Franchise Net Product Sales: For the three and six months ended June 30, 2023, acute care franchise net product sales were $4.5 million and $8.3 million, respectively, which increased from $2.5 million and $3.5 million, respectively, for the same periods in 2022.
  • ZYNRELEF® Net Product Sales and PDUFA Update:
    • Net product sales of ZYNRELEF (bupivacaine and meloxicam) extended-release solution for the three and six months ended June 30, 2023 were $4.2 million and $7.7 million, respectively, which increased from $2.5 million and $3.5 million, respectively, for the same periods in 2022.
    • On July 31, 2023, Heron was notified by the U.S. Food and Drug Administration (FDA) that the Prescription Drug User Fee Act (PDUFA) approval goal date for the supplemental New Drug Application (sNDA) for ZYNRELEF was extended by three months to provide for a full review of the submission. The FDA has set a new extended PDUFA approval goal date of January 23, 2024.
  • APONVIE® Net Product Sales:
    • Net product sales of APONVIE for the three and six months ended June 30, 2023 were $0.3 million and $0.6 million, respectively, with no sales in the comparable prior year periods. APONVIE became commercially available in the U.S. on March 6, 2023.

Oncology Care Franchise 

  • Oncology Care Franchise Net Product Sales: For the three and six months ended June 30, 2023, oncology care franchise net product sales were $27.3 million and $53.1 million, respectively, which increased from $25.1 million and $47.5 million, respectively, for the same periods in 2022.
  • CINVANTI Net Product Sales: Net product sales of CINVANTI (aprepitant) injectable emulsion for the three and six months ended June 30, 2023 were $24.5 million and $47.3 million, respectively, which increased from $22.7 million and $43.0 million, respectively, for the same periods in 2022.
  • CINVANTI ANDA Litigation: Heron recently had a favorable outcome at the Markman hearing in the pending Hatch-Waxman Abbreviated New Drug Application litigation against Fresenius Kabi to enforce our CINVANTI patents. We are pleased with the outcome and will continue to vigorously enforce and defend our patent portfolio.
  • SUSTOL® Net Product Sales: Net product sales of SUSTOL (granisetron) extended-release injection for the three and six months ended June 30, 2023 were $2.8 million and $5.8 million, respectively, which increased from $2.4 million and $4.5 million, respectively, for the same periods in 2022.
  • 2023 Oncology Care Franchise Net Product Sales Guidance: Heron is reiterating full-year 2023 net product sales guidance for the oncology care franchise of $99 million to $103 million.

The Company also recently granted equity awards to four new employees, with grant dates ranging from July 31 through August 14, 2023, as equity inducement awards outside of the Company's Amended and Restated 2007 Equity Incentive Plan. The employees received, in the aggregate, options to purchase up to 710,000 shares of the Company's common stock. The options subject to each respective award have an exercise price equal to the closing price per share of the Company's common stock as reported on the Nasdaq Capital Market on each employee's respective employment start date. The options subject to these awards each have a 10-year term with a four-year vesting schedule, with 25% of the shares subject to the option vesting on the first anniversary of the grant date and the remaining 75% vesting on a monthly basis over the next three years, subject to each respective employee's continuous service through each vesting date. In accordance with Nasdaq Listing Rule 5635(c)(4), the inducement award grants were approved by Heron's Compensation Committee of the Board of Directors and made as a material inducement to each employee entering into employment with the Company.

Conference Call and Webcast 

Heron will host a conference call and webcast on August 14, 2023 at 4:30 p.m. ET. The conference call can be accessed by dialing (646) 307-1963 for domestic callers and (800) 715-9871 for international callers. Please provide the operator with the passcode 5410567 to join the conference call. The conference call will also be available via webcast under the Investor Relations section of Heron's website at www.herontx.com. An archive of the teleconference and webcast will also be made available on Heron's website for 60 days following the call.

About ZYNRELEF for Postoperative Pain 

ZYNRELEF is the first and only dual-acting local anesthetic that delivers a fixed-dose combination of the local anesthetic bupivacaine and a low dose of nonsteroidal anti-inflammatory drug meloxicam. ZYNRELEF is the first and only extended-release local anesthetic to demonstrate in Phase 3 studies significantly reduced pain and significantly increased proportion of patients requiring no opioids through the first 72 hours following surgery compared to bupivacaine solution, the current standard-of-care local anesthetic for postoperative pain control. ZYNRELEF was initially approved by the FDA in May 2021 for use in adults for soft tissue or periarticular instillation to produce postsurgical analgesia for up to 72 hours after bunionectomy, open inguinal herniorrhaphy and total knee arthroplasty. In December 2021, the FDA approved an expansion of ZYNRELEF's indication. In December 2022, we submitted an sNDA to support the proposed indication for greatly expanded use of ZYNRELEF in soft tissue and orthopedic surgical procedures. On July 31, 2023, the FDA notified Heron of an extension of the PDUFA approval goal date by three months to provide for a full review of the submission. The FDA has set a new extended PDUFA approval goal date of January 23, 2024. ZYNRELEF is now indicated in the U.S. in adults for soft tissue or periarticular instillation to produce postsurgical analgesia for up to 72 hours after foot and ankle, small-to-medium open abdominal, and lower extremity total joint arthroplasty surgical procedures. Safety and efficacy have not been established in highly vascular surgeries, such as intrathoracic, large multilevel spinal, and head and neck procedures. ZYNRELEF was granted a marketing authorization by the European Commission in September 2020 and by the United Kingdom Regulatory Authority in January 2021. In August 2023, we cancelled the U.K. marketing authorization for ZYNRELEF, as we do not plan to commercially launch ZYNRELEF in the U.K. As of August 2, 2023, ZYNRELEF is approved in 30 European countries including the countries of the European Union and the European Economic Area. ZYNRELEF is indicated in Europe for the treatment of somatic postoperative pain from small- to medium-sized surgical wounds in adults.

Please see full prescribing information, including Boxed Warning, at www.ZYNRELEF.com.

About APONVIE for Postoperative Nausea and Vomiting (PONV) 

APONVIE is a substance NK1 Receptor Antagonist (RA), indicated for the prevention of PONV in adults. Delivered via a 30-second IV push, APONVIE 32 mg was demonstrated to be bioequivalent to oral aprepitant 40 mg with rapid achievement of therapeutic drug levels. APONVIE is the same formulation as Heron's approved drug product CINVANTI. APONVIE is supplied in a single-dose vial that delivers the full 32 mg dose for PONV. APONVIE was approved by the FDA in September 2022 and became commercially available in the U.S. on March 6, 2023.

Please see full prescribing information at www.APONVIE.com.

About CINVANTI for Chemotherapy Induced Nausea and Vomiting (CINV) Prevention 

CINVANTI, in combination with other antiemetic agents, is indicated in adults for the prevention of acute and delayed nausea and vomiting associated with initial and repeat courses of highly emetogenic cancer chemotherapy (HEC) including high-dose cisplatin as a single-dose regimen, delayed nausea and vomiting associated with initial and repeat courses of moderately emetogenic cancer chemotherapy (MEC) as a single-dose regimen, and nausea and vomiting associated with initial and repeat courses of MEC as a 3-day regimen. CINVANTI is an IV formulation of aprepitant, an NK1 RA. CINVANTI is the first IV formulation to directly deliver aprepitant, the active ingredient in EMEND® capsules. Aprepitant (including its prodrug, fosaprepitant) is the only single-agent NK1 RA to significantly reduce nausea and vomiting in both the acute phase (0–24 hours after chemotherapy) and the delayed phase (24–120 hours after chemotherapy). The FDA-approved dosing administration included in the U.S. prescribing information for CINVANTI include 100 mg or 130 mg administered as a 30-minute IV infusion or a 2-minute IV injection.

Please see full prescribing information at www.CINVANTI.com

About SUSTOL for CINV Prevention 

SUSTOL is indicated in combination with other antiemetics in adults for the prevention of acute and delayed nausea and vomiting associated with initial and repeat courses of moderately emetogenic chemotherapy (MEC) or anthracycline and cyclophosphamide (AC) combination chemotherapy regimens. SUSTOL is an extended-release, injectable 5-hydroxytryptamine type 3 RA that utilizes Heron's Biochronomer® drug delivery technology to maintain therapeutic levels of granisetron for ≥5 days. The SUSTOL global Phase 3 development program was comprised of two, large, guideline-based clinical studies that evaluated SUSTOL's efficacy and safety in more than 2,000 patients with cancer. SUSTOL's efficacy in preventing nausea and vomiting was evaluated in both the acute phase (0–24 hours after chemotherapy) and delayed phase (24–120 hours after chemotherapy).

Please see full prescribing information at www.SUSTOL.com.

About Heron Therapeutics, Inc.

Heron Therapeutics, Inc. is a commercial-stage biotechnology company focused on improving the lives of patients by developing and commercializing therapeutic innovations that improve medical care. Our advanced science, patented technologies, and innovative approach to drug discovery and development have allowed us to create and commercialize a portfolio of products that aim to advance the standard-of-care for acute care and oncology patients. For more information, visit www.herontx.com.

Forward-looking Statements 

This news release contains "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995. Heron cautions readers that forward-looking statements are based on management's expectations and assumptions as of the date of this news release and are subject to certain risks and uncertainties that could cause actual results to differ materially, including, but not limited to, uncertainties related to market conditions; the potential market opportunities for ZYNRELEF, APONVIE, CINVANTI and SUSTOL; the net product sales guidance for the oncology care franchise and the acute care franchise; the results of the commercial launch of APONVIE; the timing of the FDA's review process and whether the FDA approves the sNDA for ZYNRELEF to further expand the U.S. label; the potential additional market opportunity for the expanded U.S. label for ZYNRELEF, if approved; the expected future balances of Heron's cash, cash equivalents and short-term investments; the expected duration over which Heron's cash, cash equivalents and short-term investments balances will fund its operations and the risk that future equity financings may be needed; failure to realize the expected benefits from the cost reduction plan and restructuring; any inability or delay in achieving profitability; and other risks and uncertainties identified in the Company's filings with the U.S. Securities and Exchange Commission. Forward-looking statements reflect our analysis only on their stated date, and Heron takes no obligation to update or revise these statements except as may be required by law.

                                                                           Heron Therapeutics, Inc.

                                                                 Consolidated Statements of Operations

                                                                (In thousands, except per share amounts)

 
  

Three Months Ended
June 30,

 

Six Months Ended

June 30,

  

2023

 

2022

 

2023

 

2022

Revenues:

        

Net product sales

 

$  31,762

 

$ 27,630

 

$ 61,377

 

$  51,087

Operating expenses:

        

Cost of product sales

 

20,158

 

16,175

 

37,012

 

27,530

Research and development

 

17,572

 

28,834

 

31,389

 

70,904

General and administrative

 

15,230

 

9,181

 

26,083

 

18,714

Sales and marketing

 

21,205

 

22,938

 

42,359

 

46,360

Total operating expenses

 

74,165

 

77,128

 

136,843

 

163,508

Loss from operations

 

(42,403)

 

(49,498)

 

(75,466)

 

(112,421)

Other income (expense), net

 

344

 

(6,861)

 

639

 

(7,826)

Net loss

 

$(42,059)

 

$(56,359)

 

$(74,827)

 

$(120,247)

Basic and diluted net loss per share

 

$    (0.35)

 

$    (0.55)

 

$    (0.63)

 

$      (1.18)

Weighted average common shares outstanding, basic and diluted

 

119,719

 

102,405

 

119,484

 

102,265

                                                  Heron Therapeutics, Inc.

                                               Consolidated Balance Sheets

                                                       (in thousands)

 
 
  

June 30,
2023

 

December 31,
2022

  

(Unaudited)

  

ASSETS

    

Current assets:

    

Cash and cash equivalents

 

$          13,462

 

$          15,364

Short-term investments

 

19,782

 

69,488

Accounts receivable, net

 

76,693

 

52,049

Inventory

 

44,623

 

54,573

Prepaid expenses and other current assets

 

10,720

 

13,961

Total current assets

 

165,280

 

205,435

Property and equipment, net

 

20,873

 

22,160

Right-of-use lease assets

 

6,488

 

7,645

Other assets

 

8,583

 

15,711

Total assets

 

$        201,224

 

$        250,951

LIABILITIES AND STOCKHOLDERS' EQUITY

    

Current liabilities:

    

Accounts payable

 

$            1,957

 

$            3,225

Accrued clinical and manufacturing liabilities

 

19,881

 

24,468

Accrued payroll and employee liabilities

 

9,856

 

13,416

Other accrued liabilities

 

52,448

 

38,552

Current lease liabilities

 

2,580

 

2,694

Total current liabilities

 

86,722

 

82,355

Non-current lease liabilities

 

4,158

 

5,499

Non-current convertible notes payable, net

 

149,387

 

149,284

Other non-current liabilities

 

241

 

241

Total liabilities

 

240,508

 

237,379

Stockholders' equity (deficit):

    

Common stock

 

1,199

 

1,191

Additional paid-in capital

 

1,829,805

 

1,807,855

Accumulated other comprehensive loss

 

(6)

 

(19)

Accumulated deficit

 

(1,870,282)

 

(1,795,455)

Total stockholders' equity (deficit)

 

(39,284)

 

13,572

Total liabilities and stockholders' equity

 

$        201,224

 

$        250,951

Investor Relations and Media Contact:
Ira Duarte
Executive Vice President, Chief Financial Officer
Heron Therapeutics, Inc.
This email address is being protected from spambots. You need JavaScript enabled to view it.
858-251-4400

 

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