Heron Therapeutics (HRTX) 10-Q 5 May 16 2016 Q1 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2016	Apr. 26, 2016
Entity Registrant Name	HERON THERAPEUTICS, INC. /DE/
Entity Central Index Key	818,033
Trading Symbol	hrtx
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	Yes
Entity Common Stock, Shares Outstanding (in shares)		36,658,139
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 68,016,000	$ 75,180,000
Short-term investments	32,391,000	$ 55,986,000
Inventory	2,744,000
Prepaid expenses and other current assets	5,050,000	$ 3,585,000
Total current assets	108,201,000	134,751,000
Property and equipment, net	$ 3,645,000	3,049,000
Other assets		45,000
Total assets	$ 111,846,000	137,845,000
Current liabilities:
Accounts payable	6,861,000	3,300,000
Accrued clinical liabilities	3,735,000	5,231,000
Accrued payroll and employee liabilities	2,969,000	4,828,000
Other accrued liabilities	3,217,000	4,154,000
Convertible notes payable to related parties, net of discount	2,388,000	2,222,000
Total current liabilities	19,170,000	19,735,000
Stockholders’ equity:
Common stock	363,000	361,000
Additional paid-in capital	538,585,000	530,617,000
Accumulated other comprehensive income (loss)	1,000	(40,000)
Accumulated deficit	(446,273,000)	(412,828,000)
Total stockholders’ equity	92,676,000	118,110,000
Total liabilities and stockholders’ equity	$ 111,846,000	$ 137,845,000

Condensed Consolidated Statemen

Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating expenses:
Research and development	$ 16,092	$ 14,504
General and administrative	5,367	3,587
Sales and marketing	11,853	2,269
Total operating expenses	33,312	20,360
Loss from operations	(33,312)	(20,360)
Interest expense, net	(133)	(210)
Net loss	(33,445)	$ (20,570)
Other comprehensive income:
Unrealized gains on short-term investments	41
Comprehensive loss	$ (33,404)	$ (20,570)
Basic and diluted net loss per share (in dollars per share)	$ (0.92)	$ (0.70)
Shares used in computing basic and diluted net loss per share (in shares)	36,229	29,392

Condensed Consolidated Stateme4

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating activities:
Net loss	$ (33,445,000)	$ (20,570,000)
Adjustments to reconcile net loss to net cash used for operating activities:
Stock-based compensation expense	5,355,000	2,551,000
Depreciation and amortization	238,000	152,000
Amortization of Debt Discount (Premium)	166,000	$ 151,000
Amortization of premium on short-term investments	145,000
Changes in operating assets and liabilities:
Inventory	(2,744,000)
Prepaid expenses and other assets	(1,420,000)	$ 112,000
Accounts payable	3,561,000	(166,000)
Accrued clinical liabilities	(1,496,000)	(293,000)
Accrued payroll and employee-related liabilities	(1,859,000)	(1,075,000)
Other accrued liabilities	(852,000)	(531,000)
Net cash used for operating activities	(32,351,000)	$ (19,669,000)
Investing activities:
Maturities of short-term investments	23,491,000
Purchases of property and equipment	(834,000)	$ (328,000)
Net cash provided by (used for) investing activities	22,657,000	(328,000)
Financing activities:
Proceeds from stock option exercises	2,530,000	2,878,000
Net cash provided by financing activities	2,530,000	2,878,000
Net decrease in cash and cash equivalents	(7,164,000)	(17,119,000)
Cash and cash equivalents at beginning of period	75,180,000	72,675,000
Cash and cash equivalents at end of period	$ 68,016,000	$ 55,556,000

Note 1 - Business

Note 1 - Business	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
Business Description and Basis of Presentation [Text Block]	1. Business Overview Heron Therapeutics, Inc. is a biotechnology company focused on improving the lives of patients by developing best-in-class medicines that address major unmet medical needs. We are developing novel, patient-focused solutions that apply our innovative science and technologies to already-approved pharmacological agents. Our goal is to build on therapeutics with well-known pharmacology by improving their tolerability and efficacy as well as broadening their potential field of use. We are currently developing pharmaceutical product candidates for patients suffering from cancer or pain. SUSTOL ® In addition to SUSTOL, we are currently developing HTX-019, an intravenous formulation of the neurokinin-1 receptor antagonist aprepitant, for the prevention of CINV and HTX-011, a long-acting injectable formulation of the local anesthetic bupivacaine in a fixed-dose combination with the anti-inflammatory agent meloxicam, for the prevention of post-operative pain. Liquidity We have incurred significant operating losses and negative cash flows from operations, and we had an accumulated deficit of $446.3 million as of March 31, 2016. As of March 31, 2016, we had cash, cash equivalents and short-term investments of $100.4 million. We believe that our current working capital is sufficient to fund operations through 2016, including pursuing regulatory approval for SUSTOL in the U.S., completing Phase 2 clinical studies currently ongoing and expected to commence in 2016 relative to our HTX-011 product candidate, filing the NDA for HTX-019, and, if approved, continuing to make significant investments to support the commercialization of SUSTOL. In the event that we pursue additional clinical development with respect to our current product candidates, pursue preclinical and/or clinical development in other areas, potentially acquire other strategic assets, or if SUSTOL is not approved or has less commercial success than is expected, we may need to raise additional capital or reduce our activities. We may seek additional capital through various sources, including debt and equity offerings, corporate collaborations, bank borrowings, arrangements relating to assets, sale of royalty streams we may receive on our products or other financing methods or structures. The source, timing and availability of any financings will depend on market conditions, development program progress, interest rates and other factors. Our capital requirements going forward will depend on numerous factors, including but not limited to: the scope, rate of progress, results and costs of preclinical testing and clinical trials; an approval decision by the FDA with respect to SUSTOL; the timing of and costs associated with the commercial launch of SUSTOL, if approved; the degree of commercial success of SUSTOL; the number and characteristics of product development programs we pursue and the pace of each program, including the timing of clinical trials; the time, cost and outcome involved in seeking other regulatory approvals; scientific progress in our research and development programs; the magnitude and scope of our research and development programs; our ability to establish and maintain strategic collaborations or partnerships for research, development, clinical testing, manufacturing and marketing of our product candidates; the cost and timing of establishing sales, marketing and distribution capabilities if we commercialize products independently; the cost of establishing clinical and commercial supplies of our product candidates and any products that we may develop; and general market conditions. We may not be able to raise sufficient additional capital when we need it on favorable terms, or at all. The sale of additional equity in the future may be dilutive to our stockholders. If we are unable to obtain adequate funds on reasonable terms, we may be required to curtail operations significantly or to obtain funds by entering into financing, supply or collaboration agreements on unattractive terms.

Note 2 - Basis of Presentation

Note 2 - Basis of Presentation	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
Basis of Accounting [Text Block]	2 . B asis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for other quarters or the year ending December 31, 2016. The condensed consolidated balance sheet at December 31, 2015 has been derived from the audited financial statements as of that date, but does not include all of the information and disclosures required by GAAP. For more complete financial information, these unaudited condensed consolidated financial statements and the notes thereto should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, which was filed with the Securities and Exchange Commission (the “SEC”) on February 19, 2016 .

Note 3 - Accounting Policies

Note 3 - Accounting Policies	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
Significant Accounting Policies [Text Block]	3. Accounting Policies Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of Heron Therapeutics, Inc. and its wholly owned subsidiary, Heron Therapeutics B.V., which was organized in the Netherlands in March 2015. Heron Therapeutics B.V. has no operations and no material assets or liabilities and there have been no significant transactions related to Heron Therapeutics B.V. since its inception. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and disclosures made in the accompanying notes to the financial statements. Our critical accounting policies that involve significant judgment and estimates include accrued clinical liabilities, income taxes, stock-based compensation and pre-launch inventories. Actual results could differ materially from those estimates. Reclassifications Certain amounts in the 2015 financial statements have been reclassified to conform to the 2016 presentation. Cash, Cash Equivalents and Short-Term Investments Cash and cash equivalents consist of cash and highly liquid investments with original maturities from purchase date of three months or less. Short-term investments consist of securities with maturities from purchase date of greater than three months. We have classified our short-term investments as available-for-sale securities in the accompanying condensed consolidated financial statements. Available-for-sale securities are stated at fair market value, with unrealized gains and losses reported in other comprehensive income (loss) and realized gains and losses included in interest income. The cost of securities sold is based on the specific-identification method. Interest and dividends on securities classified as available-for-sale are included in interest income. Our bank accounts have been placed under a control agreement in accordance with our Senior Secured Convertible Notes (“Convertible Notes”). Pre-Launch Inventories W e capitalize certain inventory costs prior to regulatory approval and product launch based on management’s judgment of probable future commercial use and net realizable value of the inventory. We capitalize pre-launch quantities into inventories when we believe it is probable that: (i) a future economic benefit will be derived from the commercialization of the product; (ii) the FDA will approve the marketing of the product; and (iii) we will validate our process for manufacturing the product within the specifications that have been or will be approved by the FDA for such product. In evaluating whether it is probable that we will derive future economic benefits from our pre-launch inventories and whether the pre-launch inventories are stated at the lower of cost or market, we consider, among other things, the remaining shelf life of that inventory, the current and expected market conditions, the amount of inventory on hand, and the substance of communications with the FDA during the regulatory approval process. The manufacture of pre-launch inventories involves the risk that the FDA may not approve such product(s) for marketing on a timely basis or at all, and that each approval may require additional or different testing and/or specifications than what was performed in the manufacture of such pre-launch inventory. If any of these risks were to materialize with respect to a given product or if the launch of such product is significantly postponed, we may have to write-off the pre-launch inventories, which could be material. During the first quarter of 2016, we capitalized $2,744,000 of pre-launch inventory costs associated with SUSTOL. Earnings per Share Basic earnings per share (“EPS”) is calculated by dividing the net loss by the weighted-average number of common shares outstanding for the period, without consideration of common share equivalents. Diluted EPS is computed by dividing the net loss by the weighted-average number of common shares and common share equivalents outstanding for the period determined using the treasury stock method. For purposes of this calculation, stock options, warrants and common stock underlying Convertible Notes are considered to be common stock equivalents and are only included in the calculation of diluted EPS when their effect is dilutive. Because we have incurred a net loss for both periods presented in the condensed consolidated statements of comprehensive loss, outstanding stock options, warrants and common stock underlying Convertible Notes are not included in the computation of net loss per share because their effect would be anti-dilutive. The following table includes the number of outstanding stock options, warrants and common stock underlying Convertible Notes not included in the computation as of the dates shown below (in thousands): As of March 31, 2016 2015 Stock options outstanding 8,961 7,293 Warrants outstanding 3,565 3,843 Common stock underlying convertible notes outstanding 7,193 6,777 Comprehensive Income (Loss) Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. Unrealized gains and losses on available-for-sale securities are included in other comprehensive net loss and represent the difference between our net loss and comprehensive net loss for the three-month period ended March 31, 2016. Our comprehensive net loss for the three-month period ended March 31, 2015 was comprised solely of our net loss and there were no changes in equity from non-owner sources. Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-09 Comp ensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting In February 2016, FASB issued ASU No. 2016-02, Leases In July 2015, FASB issued ASU No. 2015-11, Inventory (Topic 330)

Note 4 - Fair Value Measurement

Note 4 - Fair Value Measurements	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
Fair Value Disclosures [Text Block]	4. Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, is as follows: ● Level 1 — Quoted prices in active markets for identical assets or liabilities. ● Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. We measure the following financial assets at fair value on a recurring basis. The fair values of these financial assets at March 31, 2016 were as follows (in thousands): Fair Value Measurements at Reporting Date Using Balance at Quoted Prices in Assets (Level 1)* Significant Inputs (Level 2)* Significant (Level 3) Money market funds $ 62,411 $ 62,411 $ — $ — United States corporate debt securities 16,813 — 16,813 — United States commercial paper 7,784 — 7,784 — Foreign commercial paper 7,794 — 7,794 — Total $ 94,802 $ 62,411 $ 32,391 $ — *There were no significant transfers between level 1 and level 2 investments for the three months ended March 31, 2016. As of March 31, 2016, short-term investments consisted of approximately $32,391,000 of available-for-sale securities with contractual maturities of one year or less. For the three months ended March 31, 2015, we did not hold any investment securities and our cash equivalents consisted of money market funds. A company may elect to use fair value to measure accounts and loans receivable, available-for-sale and held-to-maturity securities, equity method investments, accounts payable, guarantees and issued debt. Other eligible items include firm commitments for financial instruments that otherwise would not be recognized at inception and non-cash warranty obligations where a warrantor is permitted to pay a third party to provide the warranty goods or services. If the use of fair value is elected, any upfront costs and fees related to the item such as debt issuance costs must be recognized in earnings and cannot be deferred. The fair value election is irrevocable and generally made on an instrument-by-instrument basis, even if a company has similar instruments that it elects not to measure based on fair value. Unrealized gains and losses on existing items for which fair value has been elected are reported as a cumulative adjustment to beginning retained earnings and any changes in fair value are recognized in earnings. We have elected to not apply the fair value option to our financial assets and liabilities. We consider the carrying amount of cash and cash equivalents, receivables, inventory, prepaid expenses and other current assets, accounts payable and accrued liabilities to be representative of their respective fair values because of the short-term nature of those instruments. Unrealized gains and losses associated with our investments, if any, are reported in stockholders’ equity. For the three months ended March 31, 2016, we recorded approximately $41,000 in net unrealized gains associated with our short-term investments. There were no unrealized gains or losses for the three months ended March 31, 2015. Realized gains and losses associated with our investments, if any, are reported in the statement of comprehensive loss. There were no realized gains or losses for the three months ended March 31, 2016 and 2015.

Note 5 - Convertible Notes to R

Note 5 - Convertible Notes to Related Parties	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
Debt Disclosure [Text Block]	5. Convertible Notes to Related Parties In April 2011, we entered into a Securities Purchase Agreement for a private placement of up to $4.5 million in Convertible Notes. We received a total of $4.3 million, net of issuance costs, from the issuance of these Convertible Notes. The Convertible Notes are secured by substantially all of our assets, including placing our bank and investment accounts under a control agreement. The Convertible Notes bear interest at 6% per annum, payable quarterly in cash or in additional principal amount of Convertible Notes, at the election of the purchasers. The Convertible Notes mature on May 2, 2021; however, the holders of the Convertible Notes may require prepayment of the Convertible Notes at any time, at each holder’s option. The Convertible Notes are convertible into shares of our common stock at a rate of 1,250 shares for every $1,000 of principal and accrued interest due under the Convertible Notes. There is no right to convert the Convertible Notes to the extent that, after giving effect to such conversion, the holder would beneficially own in excess of 9.99% of our outstanding common stock. Each holder of the Convertible Notes can increase or decrease this beneficial ownership conversion limit by written notice to us, which will not be effective until 61 days after delivery of the notice. As of March 31, 2016, we were in compliance with all covenants under the Convertible Notes. Upon the occurrence of an event of default under the Convertible Notes, the holders of the Convertible Notes have the right to require us to redeem all or a portion of their Convertible Notes. In 2011, we filed a registration statement with the Securities and Exchange Commission (“SEC”) to register for resale 3.5 million shares underlying the Convertible Notes. The registration statement was declared effective on July 29, 2011. The Convertible Note holders have agreed to waive their right to require us to maintain the effectiveness of the registration statement and to register the additional shares underlying the Convertible Notes until they provide notice otherwise. The Convertible Notes contain an embedded conversion feature that was in-the-money on the issuance dates. Based on an effective fixed conversion rate of 1,250 shares for every $1,000 of principal and accrued interest due under the Convertible Notes, the total conversion benefit at issuance exceeded the loan proceeds. Therefore, a debt discount was recorded in an amount equal to the face value of the Convertible Notes on the issuance dates and we began amortizing the resultant debt discount over the respective 10-year term of the Convertible Notes. During the three months ended March 31, 2016, accrued interest of approximately $85,000 was paid-in-kind and rolled into the Convertible Note principal balance, which resulted in an additional debt discount of approximately $85,000. For the three months ended March 31, 2016 and 2015, interest expense relating to the stated rate was approximately $86,000 and $81,000, respectively, and interest expense relating to the amortization of the debt discount was approximately $166,000 and $151,000, respectively. As of March 31, 2016, the carrying value of the Convertible Notes was approximately $2,388,000, which is comprised of the $5,754,000 principal amount of the Convertible Notes outstanding, less debt discount of $3,366,000. If the $5,754,000 principal amount of Convertible Notes is converted, we would issue 7,192,858 shares of our common stock.

Note 6 - Stockholders' Equity

Note 6 - Stockholders' Equity	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
Stockholders' Equity Note Disclosure [Text Block]	6. Stockholders’ Equity 2015 Common Stock Offering In June 2015, we sold approximately 5,520,000 shares of our common stock at a public offering price of approximately $24.75 per share. We received total net proceeds of approximately $128.2 million (net of approximately $8.4 million in issuance costs) from the sale of the common stock. Private Placement Warrants In June 2011, we sold shares of common stock and warrants to purchase common stock in a private placement. A total of 4,000,000 warrants to purchase common stock at an exercise price of $3.60 per share were issued as part of this private placement. The warrants expire on July 1, 2016. The warrants may be exercised for cash only, or, if a registration statement is not then effective and available for the resale of the shares of common stock issuable upon exercise of the warrants, by surrender of such warrant, or a portion of such warrant, by way of cashless exercise. There is currently no effective registration statement for these warrants. There is no right to exercise the warrants to the extent that, after giving effect to such exercise the holder would beneficially own in excess of 9.99% of our outstanding shares of common stock or such other limit as may be designated by any particular purchaser. Each holder of the warrants can amend or waive the foregoing limitation by written notice to us, with such waiver taking effect only upon the expiration of a 61-day notice period. There were no warrant exercises during the three months ended March 31, 2016. During the three months ended March 31, 2015, warrant holders exercised 66,667 warrants under the cashless exercise provision in each such holder’s warrant, which resulted in the net issuance of 47,588 shares of common stock and no net cash proceeds to us. As of March 31, 2016, 2,965,000 warrants from the June 2011 Private Placement remain outstanding. Stock Option Exercises For the three months ended March 31, 2016, 243,031 shares of common stock were issued pursuant to the exercise of stock options, resulting in proceeds to us of approximately $2,530,000. For the three months ended March 31, 2015, 351,698 shares of common stock were issued pursuant to the exercise of stock options, resulting in proceeds to us of approximately $2,878,000. Stock-Based Compensation The following table summarizes stock-based compensation expense related to stock-based payment awards granted pursuant to all of our equity compensation arrangements for the three months ended March 31, 2016 and 2015 (in thousands): Three Months Ended March 31 , 2016 2015 Research and development $ 2,073 $ 806 General and administrative 1,667 1,002 Sales and marketing 1,615 743 Stock-based compensation expense included in operating expenses $ 5,355 $ 2,551 Impact on basic and diluted net loss per share $ 0.15 $ 0.09 As of March 31, 2016, there was $69,971,000 of total unrecognized compensation cost related to non-vested, stock-based payment awards granted under all of our equity compensation plans and all non-plan option grants. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures. We expect to recognize this compensation cost over a weighted-average period of 2.4 years. We estimated the fair value of each option grant on the grant date using the Black-Scholes option pricing model with the following weighted-average assumptions: March 31, 20 16 20 15 Risk-free interest rate 1.6 % 1.6 % Dividend yield 0.0 % 0.0 % Volatility 90.6 % 91.7 % Expected life (years) 6 6 We estimate the fair value of each purchase right granted under our 1997 Employee Stock Purchase Plan at the beginning of each new offering period using the Black-Scholes option valuation model. There were no new offering periods for the quarters ended March 31, 2016 and 2015. The following table summarizes the stock option activity for the three months ended March 31, 2016: Shares Weighted- Weighted- Contractual Term Balance at January 1, 2016 8,435 $ 13.64 7.94 Granted 925 $ 20.80 Exercised (243 ) $ 10.41 Expired and forfeited (156 ) $ 23.61 Balance at March 31, 2016 8,961 $ 14.30 8.06

Note 7 - Income Taxes

Note 7 - Income Taxes	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
Income Tax Disclosure [Text Block]	7. Income Taxes Deferred income tax assets and liabilities are recognized for temporary differences between financial statements and income tax carrying values using tax rates in effect for the years such differences are expected to reverse. Due to uncertainties surrounding our ability to generate future taxable income and consequently realize such deferred income tax assets, a full valuation allowance has been established. We continue to maintain a full valuation allowance against our deferred tax assets as of March 31, 2016. The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more likely than not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. There have been no material changes in our unrecognized tax benefits since December 31, 2015 and, as such, disclosures included in our 2015 Annual Report on Form 10-K for the year ended December 31, 2015 continue to be relevant for the period ended March 31, 2016.

Significant Accounting Policies

Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Consolidation, Policy [Policy Text Block]	Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of Heron Therapeutics, Inc. and its wholly owned subsidiary, Heron Therapeutics B.V., which was organized in the Netherlands in March 2015. Heron Therapeutics B.V. has no operations and no material assets or liabilities and there have been no significant transactions related to Heron Therapeutics B.V. since its inception.
Use of Estimates, Policy [Policy Text Block]	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and disclosures made in the accompanying notes to the financial statements. Our critical accounting policies that involve significant judgment and estimates include accrued clinical liabilities, income taxes, stock-based compensation and pre-launch inventories. Actual results could differ materially from those estimates.
Reclassification, Policy [Policy Text Block]	Reclassifications Certain amounts in the 2015 financial statements have been reclassified to conform to the 2016 presentation.
Cash, Cash Equivalents, and Short-Term Investments [Policy Text Block]	Cash, Cash Equivalents and Short-Term Investments Cash and cash equivalents consist of cash and highly liquid investments with original maturities from purchase date of three months or less. Short-term investments consist of securities with maturities from purchase date of greater than three months. We have classified our short-term investments as available-for-sale securities in the accompanying condensed consolidated financial statements. Available-for-sale securities are stated at fair market value, with unrealized gains and losses reported in other comprehensive income (loss) and realized gains and losses included in interest income. The cost of securities sold is based on the specific-identification method. Interest and dividends on securities classified as available-for-sale are included in interest income. Our bank accounts have been placed under a control agreement in accordance with our Senior Secured Convertible Notes (“Convertible Notes”).
Inventory, Policy [Policy Text Block]	Pre-Launch Inventories W e capitalize certain inventory costs prior to regulatory approval and product launch based on management’s judgment of probable future commercial use and net realizable value of the inventory. We capitalize pre-launch quantities into inventories when we believe it is probable that: (i) a future economic benefit will be derived from the commercialization of the product; (ii) the FDA will approve the marketing of the product; and (iii) we will validate our process for manufacturing the product within the specifications that have been or will be approved by the FDA for such product. In evaluating whether it is probable that we will derive future economic benefits from our pre-launch inventories and whether the pre-launch inventories are stated at the lower of cost or market, we consider, among other things, the remaining shelf life of that inventory, the current and expected market conditions, the amount of inventory on hand, and the substance of communications with the FDA during the regulatory approval process. The manufacture of pre-launch inventories involves the risk that the FDA may not approve such product(s) for marketing on a timely basis or at all, and that each approval may require additional or different testing and/or specifications than what was performed in the manufacture of such pre-launch inventory. If any of these risks were to materialize with respect to a given product or if the launch of such product is significantly postponed, we may have to write-off the pre-launch inventories, which could be material. During the first quarter of 2016, we capitalized $2,744,000 of pre-launch inventory costs associated with SUSTOL.
Earnings Per Share, Policy [Policy Text Block]	Earnings per Share Basic earnings per share (“EPS”) is calculated by dividing the net loss by the weighted-average number of common shares outstanding for the period, without consideration of common share equivalents. Diluted EPS is computed by dividing the net loss by the weighted-average number of common shares and common share equivalents outstanding for the period determined using the treasury stock method. For purposes of this calculation, stock options, warrants and common stock underlying Convertible Notes are considered to be common stock equivalents and are only included in the calculation of diluted EPS when their effect is dilutive. Because we have incurred a net loss for both periods presented in the condensed consolidated statements of comprehensive loss, outstanding stock options, warrants and common stock underlying Convertible Notes are not included in the computation of net loss per share because their effect would be anti-dilutive. The following table includes the number of outstanding stock options, warrants and common stock underlying Convertible Notes not included in the computation as of the dates shown below (in thousands): As of March 31, 2016 2015 Stock options outstanding 8,961 7,293 Warrants outstanding 3,565 3,843 Common stock underlying convertible notes outstanding 7,193 6,777
Comprehensive Income, Policy [Policy Text Block]	Comprehensive Income (Loss) Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. Unrealized gains and losses on available-for-sale securities are included in other comprehensive net loss and represent the difference between our net loss and comprehensive net loss for the three-month period ended March 31, 2016. Our comprehensive net loss for the three-month period ended March 31, 2015 was comprised solely of our net loss and there were no changes in equity from non-owner sources.
New Accounting Pronouncements, Policy [Policy Text Block]	Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-09 Comp ensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting In February 2016, FASB issued ASU No. 2016-02, Leases In July 2015, FASB issued ASU No. 2015-11, Inventory (Topic 330)

Note 3 - Accounting Policies (T

Note 3 - Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2016
Notes Tables
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]	As of March 31, 2016 2015 Stock options outstanding 8,961 7,293 Warrants outstanding 3,565 3,843 Common stock underlying convertible notes outstanding 7,193 6,777

Note 4 - Fair Value Measureme14

Note 4 - Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2016
Notes Tables
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]	Fair Value Measurements at Reporting Date Using Balance at Quoted Prices in Assets (Level 1)* Significant Inputs (Level 2)* Significant (Level 3) Money market funds $ 62,411 $ 62,411 $ — $ — United States corporate debt securities 16,813 — 16,813 — United States commercial paper 7,784 — 7,784 — Foreign commercial paper 7,794 — 7,794 — Total $ 94,802 $ 62,411 $ 32,391 $ —

Note 6 - Stockholders' Equity (

Note 6 - Stockholders' Equity (Tables)	3 Months Ended
	Mar. 31, 2016
Notes Tables
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]	Three Months Ended March 31 , 2016 2015 Research and development $ 2,073 $ 806 General and administrative 1,667 1,002 Sales and marketing 1,615 743 Stock-based compensation expense included in operating expenses $ 5,355 $ 2,551 Impact on basic and diluted net loss per share $ 0.15 $ 0.09
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]	March 31, 20 16 20 15 Risk-free interest rate 1.6 % 1.6 % Dividend yield 0.0 % 0.0 % Volatility 90.6 % 91.7 % Expected life (years) 6 6
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]	Shares Weighted- Weighted- Contractual Term Balance at January 1, 2016 8,435 $ 13.64 7.94 Granted 925 $ 20.80 Exercised (243 ) $ 10.41 Expired and forfeited (156 ) $ 23.61 Balance at March 31, 2016 8,961 $ 14.30 8.06

Note 1 - Business (Details Text

Note 1 - Business (Details Textual) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Retained Earnings (Accumulated Deficit)	$ (446,273)	$ (412,828)
Cash, Cash Equivalents, and Short-term Investments	$ 100,400

Note 3 - Accounting Policies (D

Note 3 - Accounting Policies (Details Textual) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Inventory, Net	$ 2,744,000

Note 3 - Equity Excluded From C

Note 3 - Equity Excluded From Calculation of Diluted Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Employee Stock Option [Member]
Shares excluded (in shares)	8,961	7,293
Warrant [Member]
Shares excluded (in shares)	3,565	3,843
Convertible Debt Securities [Member]
Shares excluded (in shares)	7,193	6,777

Note 4 - Fair Value Measureme19

Note 4 - Fair Value Measurements (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Available-for-sale Securities, Current	$ 32,391,000	$ 0	$ 55,986,000
Available-for-sale Securities, Gross Unrealized Loss		0
Available-for-sale Securities, Gross Unrealized Gain	41,000	0
Available-for-sale Securities, Gross Realized Gains	0	0
Available-for-sale Securities, Gross Realized Losses	$ 0	$ 0

Note 4 - Financial Assets Measu

Note 4 - Financial Assets Measured on a Recurring Basis (Details) $ in Thousands	Mar. 31, 2016USD ($)
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member]
Assets, fair value	$ 62,411	[1]
Money Market Funds [Member]
Assets, fair value	62,411
Domestic Corporate Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Assets, fair value	16,813	[1]
Domestic Corporate Debt Securities [Member]
Assets, fair value	16,813
United States Commercial Paper [Member] | Fair Value, Inputs, Level 2 [Member]
Assets, fair value	7,784	[1]
United States Commercial Paper [Member]
Assets, fair value	7,784
Foreign Commercial Paper [Member] | Fair Value, Inputs, Level 2 [Member]
Assets, fair value	7,794	[1]
Foreign Commercial Paper [Member]
Assets, fair value	7,794
Fair Value, Inputs, Level 1 [Member]
Assets, fair value	62,411	[1]
Fair Value, Inputs, Level 2 [Member]
Assets, fair value	32,391	[1]
Assets, fair value	$ 94,802
[1]	There were no significant transfers between level 1 and level 2 investments for the three months ended March 31, 2016.

Note 5 - Convertible Notes to21

Note 5 - Convertible Notes to Related Parties (Details Textual)	Jul. 29, 2011shares	Apr. 30, 2011USD ($)shares	Mar. 31, 2016USD ($)	Mar. 31, 2015USD ($)	Dec. 31, 2015USD ($)
Convertible Debt Securities [Member] | Common Stock [Member]
Debt Instrument Conversion Ratio Shares | shares		1,250
Convertible Debt Securities [Member] | In Case of Debt Conversion [Member]
Debt Instrument, Face Amount			$ 5,754,000
Debt Instrument, Convertible, Number of Equity Instruments			7,192,858
Convertible Debt Securities [Member]
Debt Instrument, Interest Rate, Stated Percentage		6.00%
Debt Instrument Conversion Ratio Multiple of Principal		$ 1,000
Beneficial Ownership after Conversion		9.99%
Notice Period Associated with Beneficial Ownership Percentage Limitation Convertible Notes		61 days
Paid-in-Kind Interest			$ 85,000
Debt Instrument, Increase (Decrease), Other, Net			85,000
Convertible Notes Payable, Related Parties, Current			2,388,000
Debt Instrument, Face Amount			5,754,000
Debt Instrument, Unamortized Discount			3,366,000
Convertible Debt Issuable in Connection with Private Placement		$ 4,500,000
Proceeds from Convertible Debt		$ 4,300,000
Common Shares Registered for Resale in Connection with Convertible Notes | shares	3,500,000
Interest Expense, Debt, Excluding Amortization			86,000	$ 81,000
Amortization of Debt Discount (Premium)			166,000	$ 151,000
Convertible Notes Payable, Related Parties, Current			$ 2,388,000		$ 2,222,000

Note 6 - Stockholders' Equity22

Note 6 - Stockholders' Equity (Details Textual) - USD ($)	1 Months Ended		3 Months Ended
	Jun. 30, 2015	Jun. 30, 2011	Mar. 31, 2016	Mar. 31, 2015
Common Stock [Member] | Private Placement 2011 [Member]
Stock Issued During Period, Shares, New Issues				47,588
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Exercised			0	66,667
Proceeds from Warrant Exercises				$ 0
Common Stock [Member]
Stock Issued During Period, Shares, New Issues	5,520,000
Sale of Stock, Price Per Share	$ 24.75
Proceeds from Issuance or Sale of Equity	$ 128,200,000
Payments of Stock Issuance Costs	$ 8,400,000
Private Placement 2011 [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		4,000,000
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 3.60
Beneficial Ownership after Conversion		9.99%
Notice Period Associated with Beneficial Ownership Percentage Limitation Convertible Notes		61 days
Class of Warrant or Right, Outstanding			2,965,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Net			243,031	351,698
Proceeds from Stock Options Exercised			$ 2,530,000	$ 2,878,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized			$ 69,971,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			2 years 146 days

Note 6 - Allocation of the Reco

Note 6 - Allocation of the Recognized Cost (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Research and Development Expense [Member]
Share-based compensation expense	$ 2,073	$ 806
General and Administrative Expense [Member]
Share-based compensation expense	1,667	1,002
Selling and Marketing Expense [Member]
Share-based compensation expense	1,615	743
Share-based compensation expense	$ 5,355	$ 2,551
Impact on basic and diluted net loss per share (in dollars per share)	$ 0.15	$ 0.09

Note 6 - Option Valuation Assum

Note 6 - Option Valuation Assumptions (Details) - Employee Stock Option [Member]	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Risk-free interest rate	1.60%	1.60%
Dividend yield	0.00%	0.00%
Volatility	90.60%	91.70%
Expected life (years)	6 years	6 years

Note 6 - Option Summary (Detail

Note 6 - Option Summary (Details) - $ / shares shares in Thousands	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Number of shares outstanding (in shares)	8,435
Number of shares outstanding, weighted average exercise price (in dollars per share)	$ 13.64
Number of shares outstanding, weighted average remaining contractual term	8 years 21 days	7 years 343 days
Number of shares granted (in shares)	925
Number of shares granted, weighted average exercise price (in dollars per share)	$ 20.80
Number of shares exercised (in shares)	(243)
Number of shares exercised, weighted average exercise price (in dollars per share)	$ 10.41
Number of Shares expired and forfeited (in shares)	(156)
Number of Shares expired and forfeited, weighted average exercise price (in dollars per share)	$ 23.61
Number of shares outstanding (in shares)	8,961	8,435
Number of shares outstanding, weighted average exercise price (in dollars per share)	$ 14.30	$ 13.64