HRTX - Earnings call transcript Q4 2023 | Heron Therapeutics, Inc.

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Operator

Thank you for standing by, and welcome to the Heron Therapeutics Fourth Quarter 2023 Conference Call. I would now like to welcome Melissa Dorel, Executive Director, Legal to begin the call. Melissa, over to you.

Unknown Executive

Thank you, operator, and good afternoon to everyone. Thank you for joining us on the Heron Therapeutics conference call this afternoon to discuss the company's financial results for the fourth quarter ended December 31, 2023. Officer; Heron Vice Collard, Bill Strategy President, Vice Chief from Ira Executive Ford, and today Senior President, Executive Werner, Duarte, Chief Development engagement. me are Medical Chief Craig Officer; Executive Vice With President, Kevin Affairs and Financial Officer;

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

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

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

Craig Collard

Heron and to welcome our the crossing some Therapeutics insight to and headed in performance, XXXX, strategically taken achievements this CEO business with management reduction Fourth are Earnings Therapeutics combined the development Heron steps you April on pleased Quarter our update as and financial started right afternoon, latest where XXXX place. of are we we joined to on team training we significant with back expense XXXX This Good on pression projects, Call. products. Today, into back have track. in getting It with our in headcount get

and financial of across streamlining the implemented accountability organization. efficiency enhancing comprehensive We've a processes, our

operational should slide, we the expenses move in of As $XXX million us you $XXX in we from in positioned to XXXX million see can We've beyond. as into XXXX been $XXX able $XXX to help in and be and to significant of on million million number this reduce XXXX we well have expenses a that XXXX had in operating range in XXXX. achievements

Historically, had we As have in the gross range. company looked this XX% improve margins the margin. process, our gross part of has to also

gross renegotiations a and cash allow up improve continue will over some been the manufacturers, with in by to and COGS our us able range. to better through get However, with profitability enough We mid-XXs to to which raise to to margins anticipate inventory We reduce improve XXXX. margins gross management completed to XXXX, early we've future XX%. to capital have

in to XXXX reach year cash million profitability for and with in QX is us closed in equivalents, We the cash XXXX. of again which $XX cash enough over

progressing our the to prefilled nicely which these of these and of for by year Post syringe. the expected VAN significant or approval Moving this projects were projects the in expected Both syringe along improvement XXXX. we is down pain. offers surgical to analyst, end products will the Needle of indicated prefilled the provide restart are able project with VAN approval the list, Vial Access Both with

and oncology QX pleased full OLED outperform, We're continues Our XXXX franchise of revenues also of to million, year in $XXX.X with I'm to guidance. XXXX. performance happy report very net which exceeded total

impact as cross-link in For quarter, $X the able while history, the we business. beyond. to move first was Zynrelef. label And the were do through last, January change in significant for time our we with revenue XXXX expansion net a have to Zynrelef for X should to combined These were events in sign able our revenues getting we in million the and XXXX, agreement, over even significant happening

moving oncology in coming $XX to for expectations with at SUSTOL the in million. coming franchise product combines Now continues performance. and at $XX.X million revenues our outperform to The net year

Aponvie $X been revenue we is have $X.X were we pleased has inlet for quarter. move where We of we anticipate year million, were We the consistency included which revenues $XX.X which quarter We both care oncology net positive the as ever product in in these hit positioned for move continue the and products per show believe million. Total growth product first from with net is over into very the The franchise, XXXX. a million come this we to as forward. years. very been Zynrelef million will time pleased of a Acute Acute are of as $X.X the believe the net past well same franchise and record revenues to our majority

label, going and combined is sales targeting With morale, great believe we both improved partnership increasing year with this expanded be message a for products. to the CrossLink

in that of January the CrossLink the training training X of Crosslink well. to process really kicked signed executive went began extremely the team, which Moving partnership. in-person was This We agreement off early February. on and

and early to the that continue trained, other sales ready we initial April will XXX this through group to lead trained will out country. Post continue March this over go. We to process having areas will roll and folks being of

that an what additional the will our understanding fully post this and implementation footprint having anticipate As trained you better across and line up across the of consider it add look group reps be fully will like would at a give will end by and the XXX We country entire XXXX. running the that slide, full trained. you look

fully impact we also XXXX. is from take and have into we inflection Zynrelef this an place Van believe I cylinders. of believe that impact we want enthusiasm we see after positive but new XXXX certainly do this We to an will amount the momentum, trained, of the in and will the temper in on all for move But into as coming take having reps have the time we launch Crosslinkers place. representatives all believe will will obviously, structure 'XX I really before really

signing partnership looking the have level with our on efforts it We that in more mix surgery has orthopedic has doing And a out parallel as the of get focus to footprint been increasingly apparent have more possible. in Crosslink and at the space. rehabs the of space we [indiscernible] ASP strategy tried for is become CrossLink, which these to significant our into this that with product and patients is around

going newest call , carry for now ASC Kevin operated be funds level. Warner, us forward. is having Aponvie ASP and vital strategy in need potential our Heron's extremely Ken [indiscernible] to at experience a a we pass XX products for to move our Our the the I'm Ken. Go clinician our Senior beneficial our influence with the to Strategy partners handling and have at going as will to who MedAffairs and of is ahead, is the of significant Engagement. VP Zynrelef level

Unknown Executive

Craig. Thanks,

care determination on job and as and commercial as Heron's a So banks Medical oncology of as care it and of of patients drug supporting focus the in pharmacists of the alliances joining Strategy products, over the have strategic and of for care clinical collaborating the experience of support medical best care with trials years Pharmaceutical Director access be my perioperative assure development, the team sharing become panda as Heron medical our excited will of with President cute in portfolio the pharmacy to the medical community Osteo providers order to engagement to be clinical dictate. Senior therapeutics part decorative possible care Therapeutics to to Heron, addition products Vice Affairs to to to over forming have XX information and accurate and team in discovery experience

institutional note. Postoperative control postoperative overall and team of level the I indications, enhanced on of X patients Both pain having expanding on and these chief of clinical clinicians. are the positive with focus forward I've log adoption centers The patients Implementation problems. of systems, our after [indiscernible] at our are after with protocols separately protocols be to are hospital focuses BMS. pod to our financial portfolio offer and have our witnessing consider life health in surgery pain current now patient institutions. enhanced [indiscernible] viability literature the surgery, impact and [indiscernible] may an what and and surgical believe sustaining minimizing with solutions and medical to at Mines patient hero the foundation both are inbound the I commercial and and both will primary impact today, literally we clinical access, [ recovery products improve health satisfaction, while of consumption of on Apama quality the systems. pleasure look working future the by products. reducing we acting outcomes of extensive supporting positive most currently recovery in recovery our overall our essential experience to while care common pooperative general protocols, are upon best-in-class enhanced and ] and most enhanced financial concerns after payable outcomes our a operative portfolio surgery real-world had of on outpatient ambulatory evidence-based recovery

outside alternate Pandi, surgical notion payers factors can can the complications. which the procedures, X formulation [ plaintiffs, reimbursement that unmet them ] that recovery admin patients our current X minus health viability coverage in and and bundle is In are Posadas #X touched operability to of with or also and by critical outcomes risk. moderate risk bundle the XX% United and system surgical after over the providing need often have been and as moderate emulsion Both addition, performed and million of $XX In is and of underrecognized outside phases market care to awareness. has oral which production. secondary at are proposed circuit to high-risk an many diagnostic bonding our of our infusion of enhanced plastic on undesirable or those a at post-compaction patients protocols of on as most guidelines of rate efficacy the experience and the Pat has in overlooked the presently Post lack different timing clinical The surgical [indiscernible] to patients. prepresented and separate current high improving in of we States, commercial to patients. high-risk financial or in the rates patients patients. prodrug presents clinical increase had recommend reach risk but agents making XX% well readmissions factors these surgical need

compact of passion not excellent requires with used Aponvie adopted the hours, prolongation, our by set without most of has During the X side such compounding effective [indiscernible] down patients. of typical expert commonly infusion, sharing conversion form. of space a anticholinergic the and Along an formulation also of QT profile a for the X to antiemetic have XX-minute systemic efficacy, as large-scale active #X of despite pectin about followed sedation, at the they in the therapies the nearly been side perioperative lay being ranked on effects. widely to anemic prodrug Because effects XXX,XXX action or analysis safety this, is

and critical of and high-risk combining we XX acute the is and are target occupancy profile our IV allow rapid patients. when receptor moderate multiple greater agents implementation safety will push The [indiscernible] for and propose for the perioperative make duration of complications in opportunity anesthesia likely solution XX-hour a long-acting our safety and most prescribe. by with paid Aponvie's both postoperative most providers to marketing. to one those profile efficacy

Hamdan of We in prevention will and on awareness XXXX, the the both Aponvie forward the of expected which to enhance looking guidelines the have. around updated are impact education

be The drivers broadening be and this been opioid highlight clinical growth for only as trials on FDA-approved Zynrelef, want [indiscernible] significant pain the I release have being and that focus our provider Today, expense of and will consumption. For the to year. impact. anastatic themselves, some to implemented or first associated speak patient will proves awareness

to XXXX, other indicated procedures. articular all, FDA expansion of and XX paralysis and which installations by the exposure of label direct is indicated use for significant in essentially hours for tissue Zynrelef procedures, doubled butane approved now has after which significant procedures, January the to XX, the orthopedic analgesia First adults on voice. number including pro pulsurgical to soft binaries This

to clinical indicated of I recovery. post I as both opioid As considering the great eliminate need when for procedure also [indiscernible] acute support be formulary The a clinician, They which on pain the postop. consider expansion procedures a opioids, would minimizing literally pain impact analgesia any will system typically on and of an have developing provider appropriate risk or minimize release, should prescribe and the substitution. foundation for chronic label think

acute cheaper along to hesitant Some formulary on formularies can have have new to standard formulary removed and with limited [indiscernible] proven adopted anesthetics phase. the impacts of the [indiscernible] for for foundational not having multiple with the have agents as budget element broad been but due care from other presently, indications the label long-acting superior adopt to that be claimed the be of and to generic anesthetics agent number subsequent long-acting need

data third-party XXXX health doctor impacts U.S. result length and stay top lives. opioid that trials consumption, at has showing to speeds functional be our racemic trillion of system would $X.X costing service the both estimated align and many The of in continues the on opioid continues our new patient clinical Additionally, with to pain, significant outcomes.

distributed are mission the and awareness be epidemic. for will provide for to awareness, metrics XXXX, taking of need in. support the factors joint have a good be Our stewardship accredited includes in outpatient of study begin in in the proven or reduce for prevention, being opioid [indiscernible] currently which surgical major to with opioid the accrediting and , agencies to Along the bodies has and and on these that that nonopioids of government notice opioids. will amount states settlement, million we'll $XX adoption utilized stepping now eliminate treatment payment generally. major will impact to All The

we you believe, One critical Ports. will pain Crossman be successful ground, of implementation the to on multimodal the opioids the to analgesia the to as how I Craig change that call be and view will, outlined boots the foundation surgical the most having if of additional important both would previously, I factors, partnership Dr. the [indiscernible] of the paradigm. to across like for now Bill over cross tension the turn need operative will

Unknown Executive

Kevin. you, Thank

realized. first in [ in needle for We are Vans, the ] was access device vial the has this certainly PFS. improve development step it Zynrelef. will in you our In achieve opportunity final The have involves join ban, with concludes is modification expansion, and to of designed for the the excited label and for X team. precore efficiency which regards The The to been the preparation to form next step ways.

designed device, VAN the easy into the vial the a van of testing The for the the ban on product the been vial of specifically outperformed The the will installation substitute which vented physician. has with that pipes rapid Firstly, purpose the drug still. patient syringe a today. market this available includes other and market will the van used current has presentation is for by into for more provide van the BS and vented withdrawal

We room will result even scout Secondly, more staff allow secure will process into of presence bank. approval surgical efficient the by more the of of enhancing in year. physicians. for an prepare the operating presentation the anticipate in a van for Zynrelef van in sterile This product Zynrelef room in product the the this QX a for to the

presentation, we use. trade to the of ready solution QX PFS, expect the over this program preparation Of XXXX. that, product process for Once new this sterilized approved ease get Ira? In for the the and the entire of a will is Duarte. itself. been barriers course, immediate to has all left PFS sterilization use ultimate is and container system be With challenges and closure this this The Ira now available, I involve to will removed. to in turn

Ira Duarte

comments. And XXXX our product our additional in performance QX a will Craig results. add has and about year-to-date just points covered Bill. his Thanks, few I

December $XX.X representing for margins of XXXX, gross the net by write-off and for not months The million anticipate million impacted and the the for XX with $XXX.X months X revenue, the million, respectively, respectively. XX, during XX% ended year. were ended XXXX, SG&A profit any rides do expense XX% million quarter in and December product general XX, We XXXX. period loan in $XX.X Our XX negatively $XX.X million annual to million fourth future. $XX.X was inventory $XXX.X and compared the same of and of

XX XX, completed to the in of in December related Research to $XXX.X XXXX. production expenses in was million decrease XXXX. primarily and validation decrease comparable activities $XX.X related the healthcare as raw and a Zynrelef costs and development compared spend and $XX.X of for in yield were The million material to XXXX, million million ended $XX.X months period X in

costs area addition, decreased reductions XXXX In to for $XX.X overall personnel was continue in efficiencies. XXXX. XXXX million words and and as can we moving QX this in continue in related costs reduce We in period forward believe loss June and we increase to XXXX. for due net million comparable June the the to $XX.X The implemented

reduction our overall overall June, restructuring corporate clarity began early net compared company-wide loss. in to strategies for the has as as and net give of I of force $XXX.X operational on like cost-saving Looking little in XXXX. million spend with a for for several includes $XXX the now total even burn reduction. would a year-to-date period spend comparable XXXX. XXXX plan cash which well our We implementing million and bit loss more

have path much profitability. our and operational into visibility more spend now We to clear see

will stabilized noncash This every are amortization excluding and of that XXXX. see decrease compensation, in midyear million related keep our Reducing burn have reduced for [ we $XXX we million $XXX $XXX and to stock of spend as you reorganization compensation be believe from charge which was for operational operational our XXXX implementing excluding million the spend for forward we to $XXX run million, And rate slide and call, $XXX to $XX million our these the for $X will right If expenses earnings about overall cash we and reduction to you will depreciation left mind at cash of million not depreciation spend look in of going year. quarter. million. XXXX. $XXX cash amortization our compares severance revenues the OpEx million mentioned started and Please company-wide our as every spend quarter OpEx stock in as our between increasing previous ],

Moving now on our XXXX. to guidance of

We our previously to guidance margin reaffirming XX% million of and $XXX $XXX to given XXXX for for XX%. improved million gross revenue are between

anticipate to stock EBITDA spend, And to operating any now $XXX we into on and open operational be compensation $XX loss to additional our a between would current raise to and million balance I get excluding of to And plan, XXXX. not stock for million between million, sheet this, we reiterate we capital. the that EBITDA, call positive $X of anticipated questions. our to having anticipate cavitation based excluding will Our income is in do strong and be QX like any like to would million. com $XXX depreciation

Operator

now questions. is for floor The open your

first the line [Operator comes Company. question from Belanger of Serge with Needham Instructions] & Our

Serge Belanger

Can you hear me?

Unknown Executive

the of I'm part didn't sir, can we we hear Yes, that. sorry, now.

Serge Belanger

Got it.

to related X questions Zynrelef. So

the to impact any X curious then or -- since been changes guess, at means the secondly, pain or that about coverage specifically, the just now? have it's -- usage for one, you from [ And no if what do no-pay what takes weeks I seen demand expansion Zynrelef we kind can talk in sense? if do XX first And January ] once flip you've effect? when X label maybe the calendar how think you The just you of

Unknown Executive

in some where say, lot certainly when I already when And into we Okay. have we Sure. our some label would we're on-label expansion, I of Carolina. again, first seeing X spine surgery Yes, it's those certainly got business, in excitement. of surgery, I obviously, guess, day not Actually, to easier go the the saw, deeper there's a we accounts, the anecdotally, that. Ashville, centers and I go expansion, the into actually was label of

certainly we're some that. getting of So

seeing had CrossLink, said the you're the But though, don't that, at booth we AAOS necessarily certainly the 'XX that. were positive the combined around with some as excitement some really and of label think, cross-linksome think I in with year, a I Van to in over off and comments, I meeting really I Francisco, start begins think by to an a year when inflection. we're I positions of just launch the yet. the going this some But with momentum. my But certainly San again, everything as later expansion, impact. coming certainly see think dramatic But out CrossLink think into impact I and into we we're with time, seeing to take see late in

Regarding into the Kevin little insight to Opain Act, more I'm Werner, going to bit a turn give can that. who it

Unknown Executive

Yes. Serge, question. thanks for that

So the facets. from is be multiple going Opain to significant Act

provide is procedure that proven for none ambulatory reimbursement reduce centers. for does outpatient surgical in department to and the the opioids. need been the what products hospital have So

through going XXXX. covered So ASC instance through Act were for -- CHOPD and in in to XXXX Opain so Zynrelef go and is QX both already

our for beyond possibly discussed way through longer a extending time to has facilities XXXX. to that reimbursement all establish CMS XXXX. from So that the essentially frame

will look reimbursement the get us to that forward our continuing institutions. legislatures and the covered, that working share for it So help on assure adoption for patients our but we many and is with pull-through to that to

Operator

of Our with Northland next line Byrnes question comes Carl from Capital Markets. the

Carl Byrnes

do you label Understanding set for and transitioning in do see touched collaboration on a congratulations this is the -- bit already, know that I -- into the progress and And see and how up 'XX. on XXXX and ramp expansion, really the cross-link results to you the be Aponvie Zynrelef how year you the

prior growth. language the think I year-over-year acute care was XX% products and

conservative? Or think number? that's likely that you So to comfortable prove do with that

Unknown Executive

where range was when the off. exactly we mean of I and take with get your to expanded how that feel to different and together. label one fantastic. so this say you been come that Again, The with partnership, from standpoint and and weren't thing of we really perfectly the did some things then way. how do can the certainly and a one the They But that And things we crosslink now bringing point, relationships about we may personnel have these I Yes. forth. are may of Crosslink have surgeons just seem work sure the reasons do folks currently every of

So that's been everything we had hoped for at this point.

I we think that person. that had I one initial surprises with the had along training, we of the team, we there just receptive. when was And was team and did executive in at it the CrossLink. our very did We again,

another -- there, from in some of the week with person last so sales And there. folks we did training

to do we're those. to continue And so going

so I And in fully or and that of so, as should next we will have XX -- running. we about there should days the mentioned, out sort be reps XXX

really fully see certainly we temper impact some a country, don't so having and far, and I'm it's little bit do for running things really year. get we're until trying this to trans we positive while pleased. But until to a these in again, going of the think areas look, this so we're and other up just take inflect next happen off because will And and I

is this as far, so So, planned. going

Carl Byrnes

Aponvie the your a There ASC opportunity cross-sell segment. be, on you particularly and both to about Great. to collaboration. -- your opportunity And little thoughts and then you can you in what sales this, Could that terms want [indiscernible] also again, Crosslink and the elaborate significant with in might big just bit be? are of to seems follow-up. how the touched with force a

Unknown Executive

we've hate niche is go product market tried tried sort say overly And think simplified the successful most and we've certainly, moving to be a that this things, we really now bit. I Well, again, to of Yes. to way. but where we'd

And orthopedic But and expand that we'll with led is so there. from us space ASC. is going space really that in certainly parallel has that where to the

there business, if there's we we about really true as expands at think as a you our for thing the opportunity out So going ASC quickly of nausea goal rehab, real again, think associated these have partner us space look the back want an to into any last a is that to would that surgery, have get is the of the patients you them into any kind with get patients hospital. because, to

can so and is where And play. this Aponvie in come

those higher-risk patients. for so And

really with perioperative positioned are punch, do. our that we kind X feel perfectly So really exactly these is the do X-X of trying was what products to ASC

And some with that presence there there, force already CrossLink extremely some be so to move trying to that's really opening think and going path. again, in helpful doors down having we

Operator

Instructions] from of [Operator comes Our next question with Jefferies. the line Kelly Shi

Unknown Analyst

This is progress. group on And cost the on question the quick Kelly. Clare Congrats on for reductions. one just

in and XXXX have do will costs operating think you like be at So And XXXX? further more do down plan continue cost wondering, level? go XXXX. just a stable you any your to what we your to R&D and expect SG&A in point to accurate reduction plan at Like should

Unknown Executive

of $XXX given from again, may that. again, trying that But range don't Thanks, of we've look, No, We're you're changes, given we'd ourselves million, end room. some to we've to sort to these reductions made we're see And Clare. question. look be the here. I to love I from -- the through this cost the appreciate of as like $XXX just bit now lower I we've what million a significant think at of kind going year. little label mean,

you kind But range. we pretty going feel of now sort level I comfortable think forward. expect where a of again, we're this at within can

Operator

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

Craig Collard

really to look you. today, just we call joining I thank to and everyone want to Thank next everyone the for quarter. speaking forward

Operator

call. This today's concludes

You may now disconnect.

Heron Therapeutics (HRTX) 12 Mar 242023 Q4 Earnings call transcript