HRTX - Earnings call 3 2023 | Heron Therapeutics, Inc.

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Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Heron Therapeutics Q3 2023 Earnings Conference Call.

As a reminder, this conference is being recorded.

Now I'd like to turn the call over to Jeff Cohn, Executive Director, Assistant General Counsel and Assistant Secretary. Please proceed.

Jeff Cohn

good and operator, you, afternoon, everyone. Thank for call this you for third XX, joining company's us conference Therapeutics the XXXX. September ended Heron the quarter afternoon results on financial Thank to the discuss

are Heron Vice President, President, Executive Financial Chief from today Officer; Chief me Craig Chief Ryan Ira President, Executive Executive Forbes, Bill Market. and Collard, Officer; Development Duarte, Officer; Vice Vice With Craig,

Investor participating available be you of today's via page the via accessed and those slides of made conference website For are our also webcast can via conclusion following Relations of call, the call.

forward-looking reflect to public events filings as by webcast important no risks forward-looking and statements required actual do made safe outcomes conference call update obligation are quickly expectations, assumes constitute those which Before harbor as are described today's uncertainties Except with safe intend statements Securities SEC. historical we forward-looking date begin, you company's fact statement. This the not is this These statement of future uncertainties the that all forward-looking about and the let and of call, any are associated forward-looking will of that and me with of law, course subject conference of the a in provision make XXXX. and statements beliefs forward-looking to to in so. to statements. Litigation that the is in under could actual release projections, these performance, you the and company the periodic remarks remind the analysis this and the conference cause on includes not differ in statement Private judgment or of does purposes press and Act during numerous Heron statement harbor results future described from of materially the inherent plans, the The call caution We statements. to Reform based risks this for that a statements

And Executive I would like to now Collard, call Chief turn Officer. with the Craig that, over to

Craig Collard

Good Earnings Call. Today, initiatives, to and recent afternoon, for Therapeutics' for on as Thanks, to well Third rest our and XXXX Heron strategic for of Jeff. guidance the welcome quarter year third the we the pleased you update financial XXXX. as are Quarter full guidance performance XXXX

Over the past rightsize joining to as enhancing alignment across taken our with of steps processes, financial Heron accountability X our streamlining business, ensure months, We've goals. we CEO, efficiency since strategic a and organization. significant comprehensive our the implemented have

commitment optimizing combined to eliminating we positions various structure. but respond redundancies successfully to also only This enhances functions, As excellence, part operational have to market efficiency, our dynamics. us effectively commercial and of our more overall consolidation

share excited targets. goals defines vision in substantial. road efforts been achieve that short as Last, this our sustainable to growth key to in for a map that a serves strategic and we new maximize Heron vision our The clearly time results have actions future, shareholder we value. have are of developed our This our and guiding

profitable a in team the is company transformation into management of is now and Heron Our place, happening.

$XXX expenses to operational in reduction anticipate and reduced that have a year. last to $XXX take depreciation spend million We in stock will expenses, just million We further XXXX. XXXX of and comp our million in $XXX a amortization, versus excluding operating range $XXX million to

and to should can XX% combined beyond. with from larger raise XXXX. now over expired million Our over illustrate pad was in cash year's summer in back our reduction, at and XXXX to balance inventory. our With $XX operational sizes write-offs gross margin in to the XX% product of QX change due a XXXX This being to by we in manufacturing settle XXXX has fully scaling partners, realized, gross pathway more with [ anticipated been XX% margin is EBITDA to negotiations also in positive no ] improving our to and in end, and capital generally due our investors our spend efficiencies

we raises as not we sales. our for in and are anticipate any do future. current the product operational our additional see Last, laid our forseeable capital plan needing the Based have within to efficiency plan, beginning internally, our out we on business created impact

to hitting weeks, momentum highs all-time Over had their We will the both we this only ultimately, move the hit label last APONVIE launch continue lines. time and then expansion of development believe prefilled unit which are the sales. closer X all ZYNRELEF our in anticipated as VAN and syringe,

CINVANTI $X.X XXXX. for to $XX.X which million, Care million same contributing period Heron, in the same in $XX.X to net stable from pace sales the which million quarter SUSTOL sales were million, Net quarter $XX.X net increased and XXXX. of of sales franchise performance. of the Moving product continues Net in The the $XX.X $X.X million in million in for in a period sales year-to-date. were provide product product Oncology from increased revenue for

grow, Acute net Care $XX.X for to sales quarter in continues The franchise and the $X.X year-to-date. sales net million in million achieving

and were quarter to We to in Net product same XXXX. solidified million sales to compared sales for APONVIE $X.X our implemented are the $XXX,XXX. the contribute of have $X.X million of ZYNRELEF period continued the our these were product initiatives and quarter products. of for the for new excited see growth strategic plan Net

Ryan a I Go our will our call Head strategy. Ryan. Marketing, of turn now commercial the brief to view ahead, you of give over Craig, to

Unknown Executive

Craig. you, Thank

we our solidified see Acute excited implemented the We have plan, strategic are franchise. grow and to and it Care

APONVIE X-X [ our never profile. space, is and exceptional, both as punch ZYNRELEF offer sales for a to The the Care Acute has and perioperative the organization own best-in-class commercial our by Our ] across stronger. clinical been vision team supported alignment is

X the with We surgical and are pain. challenges and promoting vomiting innovative associated post-op solutions for most procedures, of nausea burdensome

sensitivity as concerns managed. cause to not our such post higher vomiting, can initial a the as op waist surgical bariatric, These properly nausea plastics, For is above and if and neurological significant procedures. are APONVIE, E&P, focus procedures, PONV

Our ability the beyond indicated early have this starting logical, and other get receptive point that to starting with expand to is a to point APONVIE surgical a lines. on formulary successes proven

to In profile, also supports which X clinical addition pathways, recommend agents APONVIE's using guidelines the distinct with our protocols. the PONV of XXXX addition different

ranging opportunity, our expanded current be our was commercial varying specialties business, Based across many focus. growth, as ZYNRELEF, opportunities execution of and surgeries wide growth base our orthopedic with With of determined well success. as to we primary have on

customer this Our more be many with for significantly will execution aligned reasons. forward moving base

the indications. pain significant associated the is other First, some experience of may most patients versus orthopedic procedures with

include should we receive a of spine approval for shoulder, the the tend surgeons orthopedic volume on higher and indications to Additionally, do anticipated XX sNDA from which January procedures would FDA.

in orthopedic partner opportunity success. the Focusing creates surgery we also field to which and distributor representatives, terrific had on have an highlighted with

APONVIE of March institutions. launched targeted and was year, we this are in our in to continuing traction gain

identify October. specialists where reviews to we of and burden consistent have month address have to ordering this scheduled X This [ result the to the ultimately in PONV P&T reviews complete P&T building advocate of wide currently, P&T, been requested customers, the of have To The base prove treatment ultimately XX XXX by with and increasing date, aim is we we continue parade approvals alone the that new X opportunity a process can ]. APONVIE. process P&C months and Currently, at volume. are gaining targeted date ] with in and that had [ some We X its XX in date focused take that accounts confirming approval and requesting cases. will order confirmed

line these a few selected have we into accounts, surgery, of results, communicating new other accounts accounts seeing increasing plan surgical X those signs These consistent encouraging provide accounts at have executed previously, then and ordering XXX in starting ] those bariatric Initial like results ordering Of levels. examples articulated organically turned positive on that X lines have surgical as growth. adoption the expand. in [ to

proven aligned as as is strategic as are excited and well Our others, plan we to come about scenario grows. this what's awareness to

trends Momentum ]. [ with recent is Azele building

in focus is on normalized to November streamlined beginning with XX recent most high year. data procedures week produce orthopedic represented ending results, Our all-time our

volume X-week prior Additionally, rate. the weeks growth X XX% represents current over a

We fourth strategy we against continue are encouraged recent to this execute as expect the beyond. to our trajectory by and that fully we quarter in trend continue

the of adoption are through there regulatory opportunities significant increase development trends, ZYNRELEF and to top milestones. near-term recent On

response sNDA is opportunity to the XX for the to ZYNRELEF procedures. PDUFA our FDA positive X First offer are it approximately covered indication. for by to increase date nearly the benefit label from the we and would scheduled excited that a million from Should We may XXXX. receive approval, January million current added patients procedures anticipate XX, additional

XX as will will from to of and improve expand development conducted the vial and planned in greater current for X minute seconds. customer than as improvement access to This currently feedback, well is market launch XXXX. significant In is in time this QX withdrawal improvement research needle XX utilization. in September Secondly,

syringe would prefilled for in any preparation out be the represent and in the most the time and in meaningful Lastly, is ZYNRELEF time immediately the in will or as spent takes on It application preparation hand. of administration. improvement withdrawal product OR equation, development generally in available this

our Duarte, Officer. turn to over I'll it Financial Chief Now Ira

Ira Duarte

our about covered Craig I Ryan. add few QX points a performance will comments, XXXX just you, product Thank results. his in has and our additional

qualifications These XX, XX% X same and X in profit months were $XX.X period XXXX. raw the and comparable of and for to million million not quarter respectively were We X representing the expenses for and any the revenue, XXXX. in and the million XXXX. in decreases to was $XX.X XXXX, and interlift impacted anticipate the large to $XX.X for compared respectively. XX, $XX.X XX% scale, and months of related of in validation for write-offs and and million XX, compared XXXX was and ended [ period The were to expenses [ X $XX.X million do $XX.X margins negatively months related by primarily during decrease general million product September $XX ] were ended activities gross spend million XX, in months net development ended completed costs future. SG&A Our production the September $XX.X X million, as Research X September material ZYNRELEF million write-offs $XX.X XXXX. September ended the $XX.X in XXXX, million the inventory ] of

in implemented XXXX [ ] due We continue to area addition, to we In believe increase can XXXX. personnel decreased overall in as forward June efficiency. cost we in and moving reduce June costs reductions to the this sports continue inlay

for the QX loss million net XXXX. in $XX.X $XX million for The XXXX was and period comparable

net to loss, of year-to-date million the Looking with is $XXX.X XXXX XXXX. comparable period million $XX.X total in loss of a net compared

we began plan [ measures implementing our our little profitability. like about reduce earlier We reduction reduction. included the cash give you and talking corporate see been several Craig a have burn. force X including path operational spend now company-wide overall more visibility to quarters overall as would restructuring like I June, taken clear as which through would ] operational in cost-saving We and and on walk spend has in the bit what into to clarity a and to have last well more much to spend now a strategies, early our

look after $XX slide If million. $XX charges after operational million. million, excluding QX charge to the we in million reduced QX to further overall of our to $XX spend $X.X the at about from excluding highlighted reorganization of which $XX was highlighted the spend reorganization million see XXXX reduced you XXXX left right, in We will the you

our mentioned to You onetime $X QX can the and million overall in stock XXXX the rate as operational $X.X decreased cash slide QX operating in and million that compensation burn our in XXXX amortization loss $XX see QX charges, previously and million and XXXX. on depreciation from excludes

in and around Our the be stock compensation, $XX.X XXXX million. will spend, operating excluding $XXX reorganization million costs, depreciation amortization and

amortization our every We have as to between have our will quarter. going compensation, rate, stock we operational be been will decrease run $XXX cash million, $XXX excluding every spend increasing quarter stabilized and million and burn depreciation believe revenues forward and

the rest of and Moving for now our to XXXX. guidance XXXX on

indicates a million which this $XX revenues with and are of net compensation, the showing of $XX cash anticipated $X We QX million. excluding a loss million loss cash EBITDA, On XXXX of stock left between million. of $XX and slide, and equivalent results XXXX, and minimum $XX million balance anticipate we between exiting

to $XXX XXXX $XXX to million between guiding and million of are XX% improved for margin We to gross XX%. revenue

$XXX Our million, depreciation and to between $XX excluding operating stock between is $X a income to $XXX anticipated amortization, compensation, million loss spend, EBITDA stock of to will be million. million excluding be and of compensation,

balance XXXX. do QX having EBITDA I additional our not raise capital. getting reiterate would sheet plan, to on we like Back we strong to this, in and you, our anticipate Craig. And to any operational to anticipate that based positive current

Craig Collard

you sense business. items the the in today's to confidence change can call, key move in this voices from we As about our probably

set, need for a the ] balance executed is place has Our sheet on profitability the team [ us business any economy expected give and to have further in we capital raise. without that

margin gross path expenses, moving are direction the on operating and Our right all the to profitability. in EBITDA

and million range $XXX continues of XXXX to we to The are million. to guidance from outperform, to for a $XX oncology $XXX franchise million million $XXX raising

I should line momentum would have volume X the significant label we over be questions. acute being which both VAN ZYNRELEF both drivers are And growth expansion products the now as and Our in weeks. the as APONVIE for well, last open to achieved launched unit for strong have record product. ZYNRELEF, like last, and for the a

Operator

of first the from comes Your line ] Byrnes from [ Carl Markets. North question Capital

Carl Byrnes

for progress, thanks Congratulations the the Great. question. on and

And First, it XX%, the issue, target? XX%. terms the I 'XX press profit profit quarter And third from margin nuances XX% peak for XX%. progressing quarter a the the recall, XXXX at the what excluding between in how giving fourth for there's it inventory of time be of and quarter, release. XX% you're the over You target? quarter? the would profit to gross gross if I'm beyond margin wondering see third with guidance the fourth Or on margin year looks do mix if gross like you the had write-offs,

Craig Collard

were of product margin, so question. with and to really the kilograms. the to if making going And in our we basically the currently because in until of different at X total first, have for a think scale-up you manufacturers. CINVANTI about XXX-kilogram XXXX, forth gross Again, finished 'XX, the from impact X,XXX going start thanks revenue. it's just Carl, We're batch largest Yes,

a [ ], Kuria primary manufacturer XXX it manufacturer is where of secondary blend now price and make had batch kilograms. Alcami our then And do with we and X sort you batch, So [ a at sizes. those then we're in X,XXX-kilogram a that, our beyond is ], secondary where we

So you a have there. also blend

in Again, ZYNRELEF that mid-XXs be fixed. margin that again, will total more of get that that's And why to of all as moving affected a bit, out outer a, just it we continue positive into sorts write-offs we'll had as have gross like years, So We the say, forward. pretty products sort the that. I range. is

of really the and that kind there's as other right well, that take XXs there X,XXX-kilogram XXX changes there. which no So to scale batch big only from The that we're with percentage. at future product will is APONVIE, be those type should lower margins in going and of thing kilograms affected

again, XX% that we So a why whole, I in move that's we'll possibly say be forward. to range mid-XXs as as

Carl Byrnes

the be with the But acute -- profitable is clearly, growth and then just Acute focus segment I franchise. That's you could to APONVIE you the were just Care ZYNRELEF. Excellent. on the And very helpful. clearly, tomorrow a CINV mean, follow-up. if from

what time for APONVIE the in might and of wondering I'm potential look your internal progression how ZYNRELEF terms from thoughts analysis? are and sales over So peak your

Craig Collard

And We EBITDA-positive have there's the X think and be mean I a be I is dollar by a where story's end which, to about ability this you're No, just be story company I will, a could bigger APONVIE this the really this week. Yes. of of not the the within again, an protecting -- here. And of again, going. if a dominate ZYNRELEF, mean, interesting -- really look perioperative it's tomorrow sort acts think but think hitting I -- an could investor and we're much kind on profitability, the that's of that your common from that, oncology of, really, oncology point investment. with what growth the we products space, multi-hundred the products. business bit I and what at you side that's think million were hedge, the we because And if and as viewpoint, that and

these and again, VAN, some then expanded that with the the you with just we're and -- look certainly ZYNRELEF of the side, feel we now ultimately doing with with prefilled syringe. market the at If things label

So of there's to there, to story little time going that's side you've again, real base a again, continues the the a be got get profitable. business. here beauty but it's more that the growth generating take to acute a capital on business And then and being of

Operator

line the question Peaker Boris Cowen. from comes next from Your of

Unknown Analyst

This Nick for is on Boris.

Just a from couple ZYNRELEF. me on

sNDA? acute does what's on do to in slow an really, be And note, distributed? will how with for First, How X far, those that franchise? quickly effect, and ZYNRELEF the will so XX% doctors have like with the And have mainly quickly the the of that increase procedures pick do will care that quickly growth think up sNDA? how to VAN specifically, you VAN driving the new year-over-year date that the same

Craig Collard

Yes.

pretty the few growth. targeting, field So trending forth. and where with product a on feel in we so especially confident We've XX% is so with done and alignment Again, the with -- again, now. days

doing And there's I training in indications. obviously going the now then, you which at in and that. assuming then that to some type so and the of January if is XX. And sNDA, thing PDUFA prep that again, Between think look we'll with expand be

then seamless will, there ZYNRELEF. where little inventory, a out you bit a it's And as more that our kit lead so you've then plan that the kits mentioned, now And And with new are as of shortly demand transition. And if initial as launch far be to in is the you got try should coming quickly. to after that felt that, September. fairly

should neatly pretty And so felt be after that. that

and is rest market the we've this been for again that's and of product important, learned difficult. with the the management reason we've And that in prep time to what is the sitting so the product really due research case the our

if VAN and will, only does, improve And of piece, it product. not it also the the issue, we that. through other will product the so And if but it, growing spend and positions what the time and the OR, some that and getting management to sterility mechanism the of really that sort you just think with reps of less us surgeries really allowing the can improves the you and improves pool handling in our expanding case simplifies help

And much so better. makes it problem that

prefilled prefilled syringe we the as ultimately, -- really simple syringe the drug. -- towards just the beauty then takes And of move aspect of it the -- a it's as out device

So instead drug. us device-drug being we a of a become of type combination, just

good just as If you other the -- really far forth. the on so data there at clinical where a it clinical this. does which what our does around and things superior it lot is a really and of look play clinically positive we're so drug And feedback, we on versus have why market, a get that's as

Unknown Analyst

And follow-up That's very a helpful. just then question.

XX the many So yes? be January that now orthopedic total then to in you And everything. mentioned that How procedures will procedures? million those would of about sNDA with in lead

Unknown Executive

Yes.

-- this Ryan, Craig. is probably So

So of ortho. out of the million be additional XX% X million going probably about to to procedures, are them X

is that's when was current well. of XX% so traction, to got our on And our ZYNRELEF Craig speaking we've what -- procedures as orthopedic business

strategy most us. as gain date, the and be the as we That's had So we've communication January our obviously approval a approval, aligned success point to to for end well. seamless it's of anticipated assume by where should

Operator

question comes Needham the [ from line of Company. next from Berg Belanger Your ] &

Serge Belanger

and [ approval? Is couple procedures do surgeries. of focus the This will generic hip with against ]? on assume we competing expect the you're that get now? then of you I what or questions orthopedic you And A EXPAREL label past target what additional once expansion, is assuming bupivacaine ZYNRELEF. mostly Curious knee it to allow orthopedic consists Serge. follow-up January,

Craig Collard

Yes.

a [indiscernible] So with of block-type I a or a nerve scenario. or lot from think you're competitive I standpoint. right times EXPAREL it's mean, typically now being EXPAREL,

a that anesthesiologist that. an really surgeons. in of lot results are clinical involved do is be the could we product orthopedic once that of in is buy beauty from the get used But So the and shown, it's this

And had this Hip be probably success is pain within knee majority mentioning most the so of a the can there. And -- real really, that's our events we've trading have other most piece surgery. is that pain. worth where the you and

is much why funny a But product to for our been issue it the think not has continue space. In that's prep very the I competitors. we competitors as that's again, clinically own of way, so So product. our demand again, conducive forth. is that our stress with as and yes, our And

hope the And label, pick shoulders. so we with up immediately, expanded will we

that right closely very we category And move related direct physician position any that takes who's with feel should doing products, different [ will similar hopefully quite think so And to area -- orthopedic as we far into be spine, immediate. we with. but like a be be shoulders will then ] can us which well do again an can as a group, a our

Serge Belanger

Okay. a of And kind terms you that going to priority forward? have potential nice a view of as or then in a partnership,

Craig Collard

question a suite. in because, keep in repeating of a drug great it's I so the No, is that general, priority. it's again, forth product prep but you the myself, they back not about think -- reps OR if generally and are I know going Yes,

medical reps. these surgeries. device specifically the space base are the However, suites all OR They ortho in suites,

us, for with a so distributor a we success territories rep. different we've done and a And had where have this in partnership few

representatives So could group an national XXX just management, complement huge could that a demand, look our say, XXX we it's especially and is at which view that for for us, as of basis introducing upon did win there and or anyway. you on that should if improve a get be let's absolutely case

is a It makes And the sense so priority. to us, the in it all world.

Operator

at no to closing the for turn call Collard like over time. remarks. I'd further Craig are to There this questions

Craig Collard

look beginning call. next the appreciate around, quarter's Thank and strides you. thank Thank making We big really for your do to think call, to we and we're turn everyone really you, to company patience. we operator. I'd here and with forward just joining this like the

Operator

participation. you conference concludes gentlemen, and Thank that call. your Ladies for today's

now Goodbye. may You disconnect.

Heron Therapeutics (HRTX) 14 Nov 232023 Q3 Earnings call transcript