HRTX - Earnings call transcript Q2 2024 | Heron Therapeutics, Inc.

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Operator

Thank you for standing by. My name is Jermaine, and I will be your conference operator today. At this time, I would like to welcome everyone to Heron Therapeutics Q2 2024 Conference Call. [Operator Instructions] I would now like to turn the call over to Melissa Jarel, Executive Director, Legal. Please go ahead.

Melissa Jarel

good and operator, you, afternoon, everyone. Thank for call this you for quarter XXXX. joining company's us conference Therapeutics the XX, June Heron the ended afternoon results on financial Thank to the discuss Heron me Vice Medical President, Affairs Vice Ejective Financial Chief are With Officer; Chief from Craig Chief Kevin Ira President, Executive Executive Forbes, Bill Engagement. President, and Strategy Collard, Officer; Development & Duarte, Officer; Vice Senior today Warner,

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

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

Craig Collard

to long update the call. our VAN performance, of Melissa. of XX we second and Therapeutics building a are financial Vial CrossLink. PDUFA achievements discussion welcome our and pleased includes morning, awaited Today, everyone, and XXXX you our on latest at NOPAIN last, ZYNRELEF earnings an product the or Heron which to towards quarter guidance of the a for includes our quarter, financial second performance, date, Thanks, partners of narrowing update September Good and progression view Needle into our Act, which publishing our training of Access the the on the

to we line reduce illustrate team to this half XXXX. with while of the I of not slide to was growing been had in we proper this mind, Now financial as business believe us that has has XXXX establish Since our Keep August team management the the the half until spends have performance; arriving, top management XXXX. fully management new looking place in financial able revenue. allowed of in dramatically impact still compare first first

margin comparing in period reduced by has As the been $XX XX%. have XXXX, you XX%. And same revenues the from XXXX. up XX% when of see slide, months can first were to expenses X the Gross from operating over improved million

million net SUSTOL oncology quarter. performance; outpace quarter to franchise of with Now of revenues million for and expectations the $XX.X moving for revenues $X.X our product continues the to net the CINVANTI

for acute products we acute the throughout with the similar net a continue care in consistency oncology franchise, our our XXXX. Total continue believe these maintain which business. to show very We of were were existing $X.X for double will revenues environment quarter year. and share is million, $X million. to revenues this quarter the market net versus ZYNRELEF record for for were competitive the $X.X million, revenues quarter net which QX APONVIE is revenue

pleased sales move only realize to direction that free new not actions this we we team, year we we are wins. transitioning and time will headed, these account bringing but for launch with advanced the our dramatic and the still with we a allow into more impact are the to label, with on all also will the submission are expanded our While which us create year, ZYNRELEF better CrossLink as our later later ZYNRELEF APONVIE selling team in and up pull-through have XXXX,

note APONVIE our I win mean where we formulary protocols we What wins surgery about type specifically As systematic possible. be a is or type. product at think that put through hospital performance, when and to level P&T place are the used APONVIE patient it's of is specific for can APONVIE in a is where important system

we provides continue of better in surgical team the high of move room having hospital and evaluate The P&T risk each gain present informs wins we on allows to use our that patients sales believe how number account opportunity procedures or ordering. evaluation surgical in operating size up moderate nausea account a usage protocol. slide, and two one with high risk. classify business. We've series the us in focus a new forecast the this already Commercially, dashboard the customers to postoperative approximately us of greatest new to moderate performance to within APONVIE expand established XX% account. the patients. The on to sharing present within establish as any is account within win these and questions reliably literature based medical This each risk happens and with the our patients We resides that vomiting. preoperatively then across and hospital. and tier. country to validated a Slide product XX by goal see of this can set [indiscernible] to you system a As Get

$XX high-risk you under will, penetration if Our potential of XX% reflects is XX% internal sales achieve of overall from the or [indiscernible] the business. million of our we have to opportunity accounts with contract. XXX currently a market target that surgical patients opportunity today of The XX%

Our of of rate as the use, and report cardiovascular action onset to confidence still effects the of on as there's convert well believe an approximate [ APONVIE with administration, high-risk absence absence the APONVIE is in certain central via of intravenous ease agents. We of of use reactions nervous preventing the XX% opportunity this side to based infusion [indiscernible] superior when ] population. approaches the PONV other an failure business system

an million surgical takes every business XX procedures the only XX account There the U.S. Heron in slide course, Of into are year. has today. estimated

the may XX% achievable, convert more of penetrating is not APONVIE While we that Heron as entire [indiscernible]. that market be does believe accounts

to anticipated now progress and of product of to used label a note of that important which hospital to Moving the off the be ZYNRELEF, within with the given have expansion, more coming we a started or improvements ASC. surgeries it the number allows January, much number in it's much XXXX. In throughout ZYNRELEF broadly

Second will QX. VAN, if introduction the in is of September, the which approved go in live

partnership, is to to surgical which inclusion and NOPAIN the of which Act, much CrossLink to continues reimbursed ZYNRELEF be anticipated Next in the bundle progress. of outside allow will last, continue the ZYNRELEF

to you a both is the together. Now VAN see when easier impact devices bit of it pick understanding

the to Spike the Needle vial. more sterility going compared VAN offers much of to the The combined from the VAN slide Our on We withdrawal is product difficult has label left-hand a [indiscernible] and boost advantages within having main preparation side current a of the configuration or ZYNRELEF the the a this The Vented right-hand of is that later the CrossLink presence the with use is tremendous been or provide year, Vial to launch. Vial since the side speed slide. launch of study on as the to the with OR to of expanded VVS Access years VAN come. ZYNRELEF two the and believe

moving CMS rules calendar supported Act. Ambulatory NOPAIN year proposed which The NOPAIN recently Now released Center relief, OPPS pain non-opioid ASC the policy rule Surgical by Outpatient XXXX. the Payment included its for Prospective and was to System, for Act;

in requirements. increase main for Act to patients to its postoperative avoid endorsement proven remove Training kicked utilize commercial Heron must barriers, opioid of include X, CMS for stands an clinical Nation, in were late of ZYNRELEF rule, our satisfy with of Non-Opioids ZYNRELEF the NOPAIN act encourage was support medications to team extremely the reduce, the This receptors Addiction and have beginning the The adoption Prevent for will or of believe providers attributes separate a CMS February XXXX, use. CrossLink off non-opioid therapies To ensure ability have replace, to we intraoperative have the to is was endorses the April will also calendar proposed pleased and ZYNRELEF. increased rule. endorsement. The adoption in alternatives ZYNRELEF at the efficacy ensure with financially March. indication postoperative that goal expected, and on effective rest more many for Overall, not patients of not the the upon ZYNRELEF action awareness, and bodies ultimately the The As opioid pain, and access follow inclusion acronym be outside the is the financial set. included, Non-Opioid policy the team opioids the the that payers in strong could incentivized executive with are with and bundle. We suit. based the will and instead on this in will product eligible rule in multiple levels. agreed proposed which which and year CMS use. surgical payment itself ZYNRELEF's benefit XXXX, the these in

ZYNRELEF spine the we joint are As reps XX have of field and and trained consisting states. been XXX CrossLink have that of fully today, selling in trauma in

Now And a obviously, curve in is that's pleased there not we field all QX. are while were this process. new sales the with in part our folks learning of progress, of these

IDN CrossLink out sales the group given account physician an training, once and product to attack messaging of process our example, a a territory. and strategy, teams for a targeting, interact comes As ultimately within to determine account to planned begins formulary a new

to still the is fully over [indiscernible] our plan full integrated this reach year. being with the continuing and country in across XXX reps trained Our expand QX

impact CrossLink. impact continue translates relationships alone, the on We surgical have new generating at a not It's physicians accounts. community, with orthopedic substantial relationships deep new with with major over ordering of XXX new impact but had CrossLink a has be team new time. Many to obvious we they impressed going these prescribing prescribing XX over substantial be is In we this and the that top the with we this physicians will introductions, XX on the ZYNRELEF revenues yet, time have surgeon QX to the introductions have revenues. are to and realized believe by

time for with something the to due some unique takes any to it with physicians get and As different, especially new application drug, delivery new or comfortable ZYNRELEF. of

is We to the we've trained CFO, as pleased Duarte, the team in with the XXXX believe will we guidance. in update to of Go to completely partnership progress over the beyond. I call change cover turn We our field. made the ZYNRELEF our financial into and this are going direction financials ahead, move extremely getting now our CrossLink and Ira and Ira.

Ira Duarte

product results. covered and Thanks, our will this comments some XXXX for our QX results performance Craig. add in I and additional Craig points operating has

Research the quarter product gross XX, XX% million profit was experienced three ended current a respectively, same prior $XX.X the the to and million XX%, product June XXXX. primarily for three increased period development ] $X million from gross years six XXXX, and improved the was related million XX% XX, primarily months did inventory ] for in was XX, decrease quarter related same expenses was period well due all well and to along support the in million activities. compared compared the an months XX%, and comparable months X or not million, ended XXXX. SG&A in million were This profit June $XX.X to Our the $XX.X [ personnel due increase primarily in to from in cost force period and XXXX. in our the $XX.X in the which to as Year-to-date, ended in XXXX, $XX and as for was reductions million and that same $XX.X decreases due development comparable see XXXX, in million respectively, write-offs XXXX. $X.X as reductions efficiencies June the in personnel costs to we to the million, period decrease XXXX. The The costs fact decrease previous the significant six for implemented in departments. as were expenses and $XX.X the related of for [ years the $XX.X and related decreases or to in

not write-offs write-off, of inventory quarter, these we but year's management. unlike last to the were $X.X million, incurred During related

to company's payment In asset no of addition, projects also forward-looking part we reported related strategy. longer million write-off $X.X of the

will write-off, our turnaround if represents depreciation $X.X exclude slide, the you have of the stock-based impairment income, our adjusted the results substantial positive on in and compensation, million business. As would management operating asset inventory a been write-off the you financial see amortization, which and operating

net the in operations the of three noted as to $XX.X investments for and This functional XX, and ended six expenses. The no XX, resulted million from was XXXX, the with expenses the comparable general the $XX.X comprehensive As XX-Q, for million. change XX, was consolidated align in statement to XXXX to incurred. in million respectively, certain research reflects million, June administrative XXXX. XXXX, condensed loss $X.X of of Cash and reclassification operating compared and to development expenses months total and period and June XXXX, at June for $XX.X short-term XX, June million months ended expenses loss $XX.X

can and efficiencies creating As within we the results, XX from cutting progress tremendous see the over in have last these months. expenses made company you

adjusted given also our we have for expenses $XXX to amortization and to stock-based range a operating previously million $XXX forward, long-lived and will write-offs. of exclude narrowing guidance assets operating inventory going and million of of impairment million. Adjusted We $XXX expenses range therefore depreciation exclude compensation, $XXX to million

range to previously and assets range loss, $XX amortization $X stock-based also call EBITDA like exclude write-offs. And and of excludes for for million we income. million our narrowing a the of to million any $XX income also long-lived we are compensation, inventory million to guidance $X EBITDA Adjusted forward, now open loss depreciation We given would and adjusted impairment will questions. of going

Operator

Renshaw. question comes Folkes your the Instructions] And of first & line with Brandon [Operator from Rodman

Brandon Folkes

you a the uptake Any color trauma most ZYNRELEF. and lot good across the joint Maybe on partnership? progress see of congratulations And just CrossLink firstly in where on on me, quarter. for with spine the

Craig Collard

it more one I'm time? sorry, say could you Brandon,

Brandon Folkes

where Any wouldn't spine color there Anything across CrossLink expected? you're new partnership? and on that have joint seeing the most the uptake trauma you with

Craig Collard

hundred been as we've -- I've this Yeah. we you my the getting had sort folks team And again, roughly at if training. of will, up No, CrossLink in couple point, been of, gone speed. in we've QX, said to had comments, a through

really dive not have that time. a is I the order But more can't we the haven't level specifically data And in of we to of majority I mean, into at impact. tell data determine so point, impact have obviously, an into one sort than been where able just orthopedic or place really largest the to with this surgeons in another. spending dice where we're to

Brandon Folkes

to expect CrossLink. ZYNRELEF? the that when retrain the thorough you comes during obviously, the or Okay. job when And VAN have elaborate a that just, tremendous just on market to then team you training maybe change to how need you training the rep be? with did quarter does with trajectory out Do to you Can revenue see CrossLink

Craig Collard

Yeah.

timing what exactly to So then that the We And along again, approval VAN so is about the there launch that. briefing do we we a been to of it's anticipate impact. VAN, think and certainly certainly But obviously being know sort have all fully by we way anticipated. will of certainly coming. And talking trained be post and approved I the going the think an time launches. that's and get the have they the

with again coming. being So and going on are on briefed we'll go what's through what's But them. of they that sort

Brandon Folkes

for one me. just Maybe lastly

quarter gross should we then tremendous that's compared How the the And at to look me. this forward? progress year-over-year. for it line, go obviously, margin On

Craig Collard

with we've range. along, At said this we we somewhere to bit, so We Again, anticipate be product that point, the again, think a mix may it mid-XXs. in that all forth, be of low vary but and we'll in little should kind continuing.

Operator

of Serge line from with comes question Needham. Next the Belanger

Serge Belanger

that one, Medicare and of a and once Craig, segments change you current us coverages will to on picture and the give you you what the reimbursement NOPAIN think year? I switch think lawsuit. The last can And Commercial then an next how just first infringement across when over or you the that? outcomes June, [indiscernible] on trial in Can decision update a the secondly, on held be patent potential month us you just could CINVANTI, June and give late expect and like things ZYNRELEF, what

Craig Collard

is get then this, address him sure. Yeah, part first of Actually, Serge, and Warner the let well. as I'll call I'll CINVANTI the piece. Kevin on the

Kevin Warner

Yeah. reimbursement a between difference Thanks product. status looks, a it picture and and regards Serge. In NOPAIN there's how pass-through to the

be right the now, to status. currently, [indiscernible] pass-through reimbursed So

outpatient And of so our patients procedure and hospital that's ASC all under our reimbursed. Medicare department patients all

fact the commercial payers with region-by-region. NOPAIN historically, as is nonopioids that the XX% our and XX% payers, fact pass-through payers, That kind and statute reasoning of that with the of I it clinical on using in these a drug be it minimizing along in attributes of come more opioids has commercial extended it nation. There's commercial a paradigm switches don't NOPAIN stipulations it provide reimbursement. them NOPAIN far that guess, to push perpetuity always the for As impact state-by-state, and of that for and and between because the continue follow and by of to lot and said, with follow but could varies somewhere the how and phrased

fence they're model. clinical efficacies economic to going paradigm, cost the So right the want the this overall the be the [indiscernible] on understand on the commercial to payers, and of they side and efficacies

perspective. payers to from expect board NOPAIN commercial current change doesn't and NOPAIN to CMS more really come we on with see the So reimbursement the

Craig Collard

strong as all in feel change this what comes we trial. -- to trial very and happened with have infringement the very really again, in the our said June positioning. along, we've sort again, we -- We feel And the And comfortable to ended in to established stated, you it get feel As down has here for was and where case, been this that's this product unable of set a as again, we and the in really unique. down invention product was had comes we this form. years made Merck all obviousness. that in --

we feel comes that did And there. to [indiscernible] what position. our and feel approved so this that, Fresenius with is we again, that not really very comfortable meet And down

Serge Belanger

decision? you you court will expect is you expires do -- that And [Technical in a a Difficulty] think get December when

Craig Collard

Yeah.

we So expecting there's ] made -- to QX yeah, remaining and then orders decision this be a in to are are [ done closing be of year.

Operator

comes Shi line Kelly next question Your of from the Jefferies. with

Unknown Analyst

Hi. This Kelly. on for is [ Clare ]

could far, that you training how field there if could product you've many so of heard the XXXX? wondering have was on or So the any anything us their think existing second CrossLink reps how that remind in selling second in for number remaining added feedback to based are I selling and change be during reps the if experience we product? is to be going the will the maybe also reps And you is in the the and in the quarter half field helpful

Craig Collard

top just Difficulty] couple XX in Georgia QX, were a had think then we reps, by But North line migrated I up to and which and maybe we [Technical of states. we Carolina, getting, hundred from end we move there. had

XXX XXX of VAN. sit at where over we and with be reps in states XX we'll launch that continues the to time now believe grow. is a And so And again, we

comes we've you this, lot sales and all folks things with really a together, another sort together working NOPAIN and CrossLink and and with label, there's of integration getting accounts happened and if our which year, this targeting Act, how is -- of that had obviously, expansion the piece the that. our of too, so of this think force trained. And And really managing the about the inflection but

takes just that so And time.

up place all said of of we I time we kind integrated. And to get that really takes majority as VAN into to of this year. view speed move sort in a order along I've of is guess out launched that all into see fully and QX next of So inflection the just 'XX we some of really and taking this QX when

Operator

from comes the of Capital Northland [Operator line Instructions] Your next Carl Markets. with Byrnes question

Carl Byrnes

on all, Congratulations road, ZYNRELEF? if generic the your see changing And at down as how that we In see the that the for event well. dynamics, follow-up a do progress. [indiscernible] a Exparel you

Kevin Warner

one jump Hey There's a them, we and Carl, it would and at see in that current multiple Warner. if generic patents confident all, that. how the a being the cited I feel to the able to yet major to has I'll as have it's they second ZYNRELEF? that generic possible did branded manufacturer scale, the financial said, of if very benefit. Appreciate to that be the impact receive then take with the sample question manufacturer to -- if one. access guess multiple market, barriers always product, it's or a you Kevin if that here of would the will, known market is challenging. But as be barrier in will they've if lack it come generic

system. generics discount market, with provide But advantages be climate, economic current healthcare to obviously, you So those the to would will. commercial to today's as come branded broadening ZYNRELEF historically, mute, specifically reimbursement, and our a in financial if to advantage most the product

the for utilizing When possibility analgesics general come mechanisms therapies, just needed are to most medicine to antagonism, in to than the at even to product. generally could therapy. package of market commercials looking NOPAIN trump from the non-opioid with a with synergies in more provide [indiscernible] reimbursement moving extent opioid-sparing with genericized I order So follow-on that Exparel multimodal effective see the novel rather

common local right? it's modalities need minimize the Suzetrigine, we eliminate or inhibitor that's a or for goal, the best-in-class to whether product an opportunities I be combined the And NAVX.X other liposome, opioids. to regional So see Vertex seek all ZYNRELEF installation bupivacaine for as oral generic as one block with like as

a liposomal competitor level, a considering fundamental at or bupivacaine Looking not. though, briefly just as

in prescribers. the route, you mechanism primary at You key will, dose, the the look if makes the the what of frequency, drug, right, have the a action, end, so the of differences ingredients, to the active

One Route combo, all is bupivacaine. one different is liposomal between The a liposomal dose liposomal and is injection regional. not. surgeon possibly of of of is So will? milligrams up or administration extended site bupivacaine drugs. They're with action, of prescriber, bupivacaine. who ZYNRELEF's is it's differ agent. liposomal a XXX single bupivacaine. your most XXX liposomal it. ZYNRELEF, for the these ZYNRELEF, ZYNRELEF, installation different to So is release, ZYNRELEF And for the for anesthesiologist Also local the doing installation process regional whether you it's importantly, and the then blockades is doing it's mainly if largely with now,

clinical has but proven and So huge severe benefit. over differences for is through trials truly comparator XX end, overall, you clinical hours fundamentals. against even ZYNRELE the pain reduction, reduction multiple of in last care when I'd head-to-head it real-world reduction opioid efficacy, looking across at, liposomal when And the also is standard piece those the at pain trials, a look mentioned showing right?

So for it fairly our makes decisions simple those institutions.

Carl Byrnes

of tuck-in Great. what activity acquisitions? opportunities a timing That's of you potential in sort complementary some very are helpful. different there? with might respect And for we to terms On seeing what topic, expect

Craig Collard

Carl, the is to getting tried hands business thanks in and call there we managing certainly calls, prior really it. really our for and put this out around great the question. Again,

active, of expenses about with these some phase bringing and and over what -- what going we've in think If look get business fairly that weeks. will team a growing looking guess, before we is bring want be if few that that it's been to in lot partnership for we to and and the with going would head next announced call. And that that a I these trying forward things done reduction call And there that area, the thing. again, active done things. a accretive But of in to no we type to at will, we're and management I has we're do everybody companies together here an really, CrossLink up. time person today, development sort shown we're on the next now be the being very And assets of lot and/or more we're of quarter's be bringing again, we've product you are the And And We're type we to can in from in. This doing. more to standpoint? just frame. to a this things. further M&A else thank next questions, short complementary

Operator

That will conclude today's call.

now You disconnect. may

Heron Therapeutics (HRTX) 6 Aug 242024 Q2 Earnings call transcript