HRTX — Heron Therapeutics, Inc.

Summary of Heron Therapeutics Q3 2025 Earnings Call

1. Key Financial Results and Metrics

• Total Net Revenues: $38.2 million for Q3 2025; $114.3 million year-to-date.
• Adjusted EBITDA: $1.5 million for Q3; $9.5 million year-to-date.
• Gross Margin: 68.8% for Q3, down from 71.2% year-over-year, primarily due to a one-time write-off of SUSTOL polymer inventory.
• Net Loss: $17.5 million for Q3, compared to a loss of $4.8 million in Q3 2024, largely due to an $11.3 million loss on debt extinguishment.
• Cash and Short-term Investments: $55.5 million as of September 30, 2025.

2. Strategic Updates and Business Highlights

• Successful completion of financing, allowing management to focus on commercial execution and product growth.
• Launch of several initiatives in the acute care portfolio, including the CrossLink Ignite program and a dedicated sales team for APONVIE.
• ZYNRELEF net sales grew 49% year-over-year to $9.3 million; APONVIE net sales increased 173% to $3 million.
• Implementation of a permanent J-code for ZYNRELEF effective October 1, which is expected to streamline reimbursement processes.
• Progress on the prefilled syringe program, with potential approval anticipated in late 2027.

3. Forward Guidance and Outlook

• Reaffirmed guidance for 2025 net revenue of $153 million to $163 million and adjusted EBITDA of $9 million to $13 million.
• Positive momentum in acute care products is expected to continue into Q4 2025 and beyond, driven by recent initiatives and increased demand.

4. Bad News, Challenges, or Points of Concern

• SUSTOL: Continued decline in sales, down 32% year-over-year, with plans to wind down commercialization over the next year.
• CINVANTI: Facing competitive pressures, with potential for price reductions to retain accounts.
• Gross Margin: Decrease attributed to inventory write-offs and increased costs, indicating potential challenges in maintaining profitability.
• Net Loss: Significant increase in net loss due to debt extinguishment, raising concerns about financial stability.

5. Notable Q&A Insights

• ZYNRELEF Demand: Early October showed a month-over-month increase of approximately 18%, indicating strong demand.
• Sales Team Effectiveness: Management expressed optimism about the new dedicated sales teams for ZYNRELEF and APONVIE, anticipating increased sales as they become fully operational.
• NOPAIN Act Implementation: Positive momentum is building, with about 75% of procedures having some form of coverage, indicating a favorable environment for ZYNRELEF.
• Future Investments: Potential for expanding sales teams in 2026 based on observed pockets of success and demand trends.

Overall, while Heron Therapeutics reported strong revenue growth and strategic advancements, it faces challenges with competitive pressures and declining sales in certain products. The company remains optimistic about its future trajectory, particularly in the acute care segment.