HERON THERAPEUTICS, INC. /DE/ Q1 FY2026 earnings call

• Overall Business Resilience

  • Q1 2026 results faced two overlapping temporary headwinds: typical seasonal softness from annual copay/insurance resets, and two weeks of severe early-quarter weather that sharply reduced elective surgical volumes, a headwind confirmed as industry-wide across multiple peer firms. March net sales recovered to over $15 million, demonstrating underlying business strength, and deferred procedures are expected to be rescheduled throughout the remainder of 2026, creating a tailwind in historically stronger H2 2026.
  • The company maintains strict pricing discipline across all active commercial products, with Zinrolef net selling prices steadily increasing, Aponvy prices stable, and Sinvanti prices returning to planned levels after a temporary Q4 2025 channel dynamic, protecting long-term franchise economics.

• Acute Care Commercial & Pipeline Updates

  • The IGNITE distributor incentive program for Zinrolef delivered 111% unit growth across 2,261 targeted accounts in H2 2025, so it has been expanded to IGNITE 2.0 covering 3,109 accounts (a 38% increase) for full-year 2026, aligned with the Crosslink partnership that now has 90% alignment between Heron and Crosslink account focus, the highest level to date.
  • Zinrolef's permanent J-code and the No Surprises Act framework have streamlined reimbursement across 110 million commercially covered lives, reducing adoption friction, and pre-filled syringe (PFS) development is on track, with registration batches manufactured for stability testing and 12-month data expected in Q1 2027.
  • Aponvy gained prominent inclusion in the fifth consensus PONV management guidelines with an A1 evidence rating (the highest level) as the only FDA-approved IV push NK1 antagonist for PONV prophylaxis, positioning it well for growing adoption amid guideline-driven shifts to proactive multimodal PONV/PDNV prevention.
  • Aponvy's permanent product-specific J-code went into effect April 1, 2026, removing remaining reimbursement complexity, and the product now has P&T approval at 1,903 facilities covering 5.8 million annual medium-to-high risk procedures.

• Oncology Commercial Updates

  • Sinvanti has maintained a stable 25% market share in the volatile NK1 chemotherapy-induced nausea and vomiting category, with high customer loyalty and stickiness among existing accounts. The company's Reignite access program for major teaching hospitals has a near-term pipeline of new formulary wins expected to add up to $10 million in annualized net revenue starting in Q2 2026.

• Organizational Updates

  • A company-wide sales force expansion is on track for Q3 2026, with dedicated expansions for both Zinrolef (targeted at high-potential geographies with existing formulary and coverage) and the Aponvy/Sinvanti team, increasing share of voice to accelerate adoption. The expansion is supported by continued disciplined cost management across the business.

Total company net sales for Q1 2026 were $34.7 million, with a gross margin of 69%.

1. Acute Care Segment: Combined net sales of $13.6 million, representing 39.2% of total Q1 net sales. Zinrolef generated $10.2 million (29.4% of total net sales) with 27% year-over-year revenue growth and 22% year-over-year demand unit growth. Aponvy generated $3.4 million (9.8% of total net sales) with over 50% year-over-year revenue growth, 68% year-over-year demand unit growth, and 67% year-over-year growth in ordering accounts, hitting an all-time high of 371 ordering accounts exiting Q1.
2. Oncology Supportive Care Segment: Combined net sales of $21.1 million, representing 60.8% of total Q1 net sales. Sinvanti generated $20.5 million (59.1% of total net sales), maintaining a stable 25% market share in the NK1 category despite competitive pressure, with resilient utilization and consistent monthly ordering accounts averaging ~1,200. Sustol generated $0.6 million (1.7% of total net sales), declining in line with the previously planned product wind-down.

• Heron Therapeutics maintains its full-year 2026 guidance, with no upward or downward revision from prior targets.
• Full-year 2026 net product sales guidance is maintained at $173 million to $183 million.
• Full-year 2026 adjusted EBITDA guidance is maintained at $10 million to $20 million, with adjusted EBITDA expected to return to positive territory in 2026 after a negative $727,000 adjusted EBITDA in Q1 2026 driven by temporary headwinds.
• Gross margins are expected to normalize back to the mid-70% range after Q1 2026 once contractual inventory obligations with Sinvanti's secondary supplier are fulfilled within the next two quarters, when the company will return exclusively to lower-cost production from the primary supplier.

• Forward-looking statements are subject to inherent uncertainties that could cause actual results to differ materially from projections, with key risks detailed in the company's SEC filings and today's earnings press release.
• Q1 results faced unforeseen exogenous risks from severe winter weather that drove a larger-than-expected decline in elective surgical volumes, which reduced quarterly revenue below internal plan.
• Sinvanti operates in a highly competitive NK1 category with ongoing competitive pressure that could impact future market share and sales.
• Friction related to provider and institutional adoption decision-making currently limits the pace of Zinrolef growth ahead of the pre-filled syringe launch.

Q: What factors underpin confidence in Zinrolef meeting guidance, including whether the company expects it to gain market share? Also, how can adoption friction for Zinrolef and Aponvy be reduced ahead of the Zinrolef pre-filled syringe launch to maximize PFS value? / A: The deferred Q1 2026 surgical volumes from winter weather will be rescheduled throughout the rest of the year, providing a visible tailwind. The mid-year 2026 sales force expansion will increase share of voice across both products, and the 38% expansion of IGNITE 2.0 will build on the program's proven 111% unit growth in H2 2025. The primary current friction is simply reaching a larger number of eligible target accounts, not product rejection, so the expanded sales team will directly address this gap, and Zinrolef is already growing share within aligned targeted accounts. This foundation will set up maximum value for the pre-filled syringe launch.

Q: Can you quantify the Q1 2026 winter storm impact on surgical volumes, and what impact has the No Surprises Act had on Zinrolef commercial coverage going into 2026? / A: Q1 2026 surgical volumes saw a high single-digit sequential decline from Q4 2025, a larger impact than in typical years driven by both weather and a record high Q4 2025 surgical volume. The No Surprises Act has greatly reduced reimbursement friction especially for government payers, and has driven growing commercial payer coverage, with the company now estimating Zinrolef has reimbursement coverage outside of surgical bundles for 110 million commercially covered lives across most of the U.S., with only small pockets of remaining bundling that the team is actively addressing.

Q: What is the strategic logic for expanding the IGNITE program with Crosslink, and what should we expect going forward? / A: Crosslink selects the target accounts for the IGNITE program, so natural selection of high-potential accounts drove the 38% expansion for 2026. Alignment between Heron and Crosslink on focused accounts is now 90%, the highest it has ever been, meaning both firms have dedicated resources in all selected accounts that already have strong payer coverage. This aligned structure has already proven to drive strong Zinrolef adoption, giving the company high confidence the expanded program will deliver solid growth in 2026.

Q: Can you share details on the Baxter settlement, including how it affects exclusivity arrangements? / A: Per the terms of the settlement, the company is forbidden from disclosing any details beyond what has already been published previously, so no additional information can be shared.