HERON THERAPEUTICS, INC. /DE/ Q4 FY2024 earnings call

Management Statement and Operational Highlights

• Business Repositioning: Since joining in April 2023, the team expanded ZYNRELEF labeling, signed and integrated CrossLink partnership (over 800 distributor reps in orthopedics), secured NOPAIN Act inclusion for ZYNRELEF, launched VAN in mid-December 2024, and won patent lawsuit against Fresenius Kabi upholding CINVANTI patents expiring in 2035.
• Financial Achievements: Achieved profitability in Q4 2024 and full-year 2024. Q4 2024 net income was $3.6M. Full-year 2024 net revenues were $144.2M (+14% YOY) with adjusted EBITDA of $8.6M.
• Operational Progress: Reduced operating expenses by over $80M since 2022. Ended 2024 with cash balance over $59M.

Segment Performance

• Oncology Franchise (CINVANTI and SUSTOL): CINVANTI net revenues rebounded in Q4 2024 to $26.9M (up from $22.7M in Q3) and full-year 2024 net revenues over $100M (up from $94.8M in 2023). Despite competition, the franchise shows growth.
• ZYNRELEF: Achieved record net revenues of $8.5M in Q4 2024, a 33% increase from Q3. Net revenues for full-year 2024 were part of the overall $144.2M net revenues, which was a 14% YOY increase. Gross margin improved from 49% in 2023 to approximately 73% in 2024.

Guidance

• Product Revenues: Net guidance range of $153M to $163M.
• Adjusted EBITDA: Guidance range of zero to $8M.
• CINVANTI Outlook: More conservative outlook for 2025 due to increased competition and potential ASP pressure, but still anticipates unit sales growth at lower price points.

Risks

• Forward-looking statements subject to numerous risks and uncertainties described in SEC filings.
• Potential lumpiness in financial results due to legal spend and project-specific factors.
• Competition in the Oncology space could impact CINVANTI's average selling price.

Q: Brandon Folkes of Rodman & Renshaw asks about ZYNRELEF's performance, stocking, and future strategy.

A: Craig Collard responds that ZYNRELEF's Q4 revenues had minimal impact from VAN launch, VAN reception is exceptional, and they're focusing on growing accounts both in depth and breadth with CrossLink partnership.

Q: Serge Belanger of Needham asks about ZYNRELEF's momentum and No Pain Act impact.

A: Craig Collard states ZYNRELEF's momentum is driven by CrossLink partnership, NOPAIN Act reimbursement starting April 1, and positive reception to VAN.

Q: Carl Byrnes of Northland Capital Markets asks about ZYNRELEF's Q1 outlook and CrossLink impact.

A: Craig Collard mentions Q1 ZYNRELEF sales higher than Q4, CrossLink reps at ~800, and anticipation of inflection midyear with 200mg launch and NOPAIN Act.

Q: Clara Donald of Jefferies asks about ZYNRELEF's prefilled syringe development.

A: William Forbes responds that stability of demo batch is positive, aiming to launch prefilled syringe near end of 2026 or first half of 2027.