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Classified in: Health, Science and technology, Business, Covid-19 virus
Subjects: ERN, ERP

Heron Therapeutics Announces Financial Results for the Three and Six Months Ended June 30, 2022 and Highlights Recent Corporate Updates


- ZYNRELEF® launch trend continues at a strong pace with sequential quarterly product sales increase of 140% and unit demand increase of 47% -

Oncology Care Franchise net product sales grew 12% over the prior quarter to $25.1 million in Q2 2022, leading to an increase in full-year 2022 net product sales guidance to $93 million to $95 million -

- Improving operating margins, the implementation of a restructuring announced in June, and other cost cutting activities are projected to achieve over $50 million in reductions in annual operating expense in 2023 -

With the proceeds from the recent private placement, pro-forma cash at the end of second quarter was $158.7 million, which is projected to provide a cash runway through 2024 -

SAN DIEGO, Aug. 9, 2022 /PRNewswire/ -- Heron Therapeutics, Inc. (Nasdaq: HRTX), a commercial-stage biotechnology company focused on improving the lives of patients by developing and commercializing therapeutic innovations that improve medical care, today announced financial results for the three and six months ended June 30, 2022 and highlighted recent corporate updates.

Recent Corporate Updates

Acute Care Franchise

Oncology Care Franchise

Corporate Restructuring and Cost Reduction Plan

In June 2022, we announced a corporate restructuring and cost reduction plan to address the current market dynamics and prepare the company for long-term sustainability. Annualized cost savings the Company expects from this restructuring, improved operating margins and other cost cutting efforts are expected to achieve over $50 million in reductions in annual operating expense in 2023.

The Company's restructuring and cost reduction plan included the following:

"Our recent private placement financing is another important strategic step for Heron. Along with our restructuring and cost reduction plans, we now believe we have sufficient cash to take us through 2024 and to become cash flow positive," said Barry Quart, Pharm.D., Chairman and Chief Executive Officer of Heron. "We are also excited to report today strong growth across both our business units, with a 140% increase in net product sales of ZYNRELEF compared to first quarter. We expect continued momentum in the second half of the year as more hospitals switch to ZYNRELEF due to its favorable clinical profile and strong reimbursement. For the oncology care franchise, we are pleased that our portfolio beat our guidance with net product sales of $25.1 million for the second quarter of 2022 and we are on track to achieve full-year 2022 net product sales of $93 million to $95 million, an increase from prior guidance. We look forward to large-scale manufacturing of CINVANTI coming on-line later this year, which is expected to substantially improve margins and drive greater profitability of the oncology care franchise. With recent changes in CMS reimbursement, CINVANTI has the opportunity for continued growth through 2023. Finally, as we near our September PDUFA date, interactions with the FDA regarding our pending NDA for HTX-019 for PONV remain on track."

Financial Results

Net product sales for the three and six months ended June 30, 2022 were $27.6 million and $51.1 million, respectively, compared to $22.4 million and $42.5 million, respectively, for the same periods in 2021.

Heron's net loss for the three and six months ended June 30, 2022 was $56.4 million, or $0.55 per share, and $120.2 million, or $1.18 per share, respectively, compared to $61.0 million, or $0.62 per share, and $113.6 million, or $1.20 per share, respectively, for the same periods in 2021. Net loss for the three and six months ended June 30, 2022 included non-cash, stock-based compensation expense of $10.4 million and $21.3 million, respectively, compared to $11.2 million and $22.7 million, respectively, for the same periods in 2021.

As of June 30, 2022, Heron had cash, cash equivalents and short-term investments of $83.5 million. Adjusting for net proceeds of $75.2 million from our August 2022 private placement, Heron had pro-forma cash, cash equivalents and short-term investments of $158.7 million. This compares to $157.6 million as of December 31, 2021. Net cash used for operating activities for the three and six months ended June 30, 2022 was $28.4 million and $72.3 million, respectively, compared to $63.0 million and $104.9 million, respectively, for the same periods in 2021. The decrease in our net cash used for operating activities was primarily due to changes in working capital related to the launch of ZYNRELEF, including manufacturing of commercial inventory, partially offset by an increase in net loss.

With the proceeds from the recent private placement, pro-forma cash at the end of second quarter was $158.7 million, which we believe is projected to provide a cash runway through 2024.

Conference Call and Webcast

Heron will host a conference call and webcast on August 9, 2022 at 8:30 a.m. ET. The conference call can be accessed by dialing 1-646-307-1963 for domestic callers and 1-800-715-9871 for international callers. Please provide the operator with the passcode 4215874 to join the conference call. The conference call will also be available via webcast under the Investor Relations section of Heron's website at www.herontx.com. An archive of the teleconference and webcast will also be made available on Heron's website for 60 days following the call.

About ZYNRELEF for Postoperative Pain

ZYNRELEF is the first and only dual-acting local anesthetic that delivers a fixed-dose combination of the local anesthetic bupivacaine and a low dose of nonsteroidal anti-inflammatory drug meloxicam. ZYNRELEF is the first and only extended-release local anesthetic to demonstrate in Phase 3 studies significantly reduced pain and significantly increased proportion of patients requiring no opioids through the first 72 hours following surgery compared to bupivacaine solution, the current standard-of-care local anesthetic for postoperative pain control. ZYNRELEF was initially approved by the FDA in May 2021 for use in adults for soft tissue or periarticular instillation to produce postsurgical analgesia for up to 72 hours after bunionectomy, open inguinal herniorrhaphy and total knee arthroplasty. In December 2021, the FDA approved an expansion of ZYNRELEF's indication. ZYNRELEF is now indicated in the U.S. in adults for soft tissue or periarticular instillation to produce postsurgical analgesia for up to 72 hours after foot and ankle, small-to-medium open abdominal, and lower extremity total joint arthroplasty surgical procedures. Safety and efficacy have not been established in highly vascular surgeries, such as intrathoracic, large multilevel spinal, and head and neck procedures. In September 2020, the European Commission granted a marketing authorization for ZYNRELEF for the treatment of somatic postoperative pain from small- to medium-sized surgical wounds in adults. As of January 1, 2021, ZYNRELEF is approved in 31 European countries including the countries of the European Union and European Economic Area and the United Kingdom. In March 2022, Health Canada issued a Notice of Compliance for ZYNRELEF for instillation into the surgical wound for postoperative analgesia after bunionectomy, open inguinal herniorrhaphy, and total knee arthroplasty surgical procedures.

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

About HTX-019 for PONV

HTX-019 is an IV injectable emulsion formulation designed to directly deliver aprepitant, the active ingredient in EMEND® (aprepitant) capsules, which is the only substance P/neurokinin-1 (NK1) receptor antagonist (RA) to be approved in the U.S. for the prevention of PONV in adults. The FDA-approved dose of oral EMEND is 40 mg for PONV prevention, which is given within 3 hours prior to induction of anesthesia for surgery. In a Phase 1 clinical trial, 32 mg of HTX-019 as a 30-second IV injection was demonstrated to be bioequivalent to oral aprepitant 40 mg. The NDA for HTX-019 for PONV was submitted in November 2021 and the FDA set a PDUFA goal date of September 17, 2022.

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

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

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

About SUSTOL for CINV Prevention

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

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

About Heron Therapeutics, Inc.

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

Forward-looking Statements

This news release contains "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995. Heron cautions readers that forward-looking statements are based on management's expectations and assumptions as of the date of this news release and are subject to certain risks and uncertainties that could cause actual results to differ materially, including, but not limited to, uncertainties related to market conditions and the completion of the private placement on the anticipated terms or at all; the potential market opportunities for ZYNRELEF in the U.S., Europe and Canada; the timing of the NDA review process for HTX-019 and whether the FDA approves HTX-019; the net product sales guidance for the oncology care franchise and the acute care franchise; the expected future balances of Heron's cash, cash equivalents and short-term investments; the expected duration over which Heron's cash, cash equivalents and short-term investments balances will fund its operations; the impact of our restructuring plans; the ability for the Company to reach profitability; the extent of the impact of the ongoing COVID-19 pandemic on our business; and other risks and uncertainties identified in the Company's filings with the U.S. Securities and Exchange Commission. Forward-looking statements reflect our analysis only on their stated date, and Heron takes no obligation to update or revise these statements except as may be required by law.

 

Heron Therapeutics, Inc.

Consolidated Statements of Operations

(In thousands, except per share amounts)





Three Months Ended

June 30,


Six Months
Ended June 30,



2022


2021


2022


2021

Revenues:


(Unaudited)

Net product sales


$        27,630


$       22,443


$    51,087


$     42,461

Operating expenses:









Cost of product sales


16,175


14,522


27,530


23,729

Research and development


28,834


35,233


70,904


73,349

General and administrative


9,181


10,907


18,714


20,480

Sales and marketing


22,938


22,250


46,360


37,486

Total operating expenses


77,128


82,912


163,508


155,044

Loss from operations


(49,498)


(60,469)


(112,421)


(112,583)

Other expense, net


(6,861)


(546)


(7,826)


(1,046)

Net loss


$     (56,359)


$     (61,015)


$(120,247)


$ (113,629)










Basic and diluted net loss per share


$          (0.55)


$         (0.62)


$     (1.18)


$      (1.20)

Shares used in computing basic and diluted net loss per share


102,405


98,459


102,265


94,943

 

Heron Therapeutics, Inc.

Consolidated Balance Sheets

(in thousands)




June 30,
2022


December 31,
2021



(Unaudited)



ASSETS





Current assets:





Cash and cash equivalents


$         48,609


$          90,541

Short-term investments


34,929


67,039

Accounts receivable, net


40,303


35,499

Inventory


61,318


48,382

Prepaid expenses and other current assets


9,050


12,962

Total current assets


194,209


254,423

Property and equipment, net


23,468


23,734

Right-of-use lease assets


8,754


9,829

Other assets


17,534


17,720

Total assets


$        243,965


$        305,706

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)





Current liabilities:





Accounts payable


$         13,804


$            3,803

Accrued clinical and manufacturing liabilities


43,670


23,716

Accrued payroll and employee liabilities


16,323


15,263

Other accrued liabilities


33,152


25,859

Current lease liabilities


2,549


2,417

Total current liabilities


109,498


71,058

Non-current lease liabilities


6,780


7,996

Non-current convertible notes payable, net


149,182


149,082

Other non-current liabilities


241


?

Total liabilities


265,701


228,136

Stockholders' equity (deficit):





Common stock


1,025


1,020

Additional paid-in capital


1,710,928


1,689,987

Accumulated other comprehensive loss


(11)


(6)

Accumulated deficit


(1,733,678)


(1,613,431)

Total stockholders' equity (deficit)


(21,736)


77,570

Total liabilities and stockholders' equity (deficit)


$       243,965


$        305,706

 

Investor Relations and Media Contact:
David Szekeres
Executive Vice President, Chief Operating Officer
Heron Therapeutics, Inc.
dszekeres@herontx.com
858-251-4447

 

SOURCE Heron Therapeutics, Inc.


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