Heron Therapeutics, a commercial-stage biotechnology company, has demonstrated impressive progress in its financial performance and product portfolio during the first quarter of 2024. The company's strategic initiatives, including the expansion of its ZYNRELEF label and the partnership with CrossLink, have positioned it for continued success and a path to profitability.
Financial Highlights
Heron Therapeutics reported net revenues of $34.6 million in the first quarter of 2024, a significant increase from the $29.6 million recorded in the same period of 2023. This 17% year-over-year growth was driven by strong performances across both the Acute Care and Oncology Care portfolios. The company's gross profit margin improved dramatically, from 43% in Q1 2023 to 76% in Q1 2024, reflecting the benefits of production scale-up, validation activities, and raw material qualifications completed in late 2022.The company's net loss for the first quarter of 2024 was $3.2 million, a substantial improvement from the $32.7 million net loss reported in the same period of the previous year. This 90% reduction in net loss was primarily due to the increase in revenues and the company's continued focus on cost optimization, including a decrease in personnel and related costs following the restructuring initiatives implemented in 2022 and 2023.
Acute Care Portfolio Momentum
Heron's Acute Care portfolio, consisting of ZYNRELEF and APONVIE, delivered impressive results in the first quarter of 2024. ZYNRELEF, the company's extended-release local anesthetic, reported net revenues of $5.0 million, representing a 42% increase from the $3.5 million recorded in Q1 2023. This growth was driven by the expanded label approved by the FDA in January 2024, which broadened the indications for ZYNRELEF to include spine, shoulder, and other soft tissue surgical procedures.The company's partnership with CrossLink, a leading distributor in the orthopedic surgical space, has been a key driver of ZYNRELEF's momentum. Within the first month of the partnership's launch, Heron has seen a 12-fold increase in unit sales growth in the initial target regions of North Carolina, South Carolina, and Georgia, with over 20 new orthopedic surgeons adopting the product. The company plans to continue expanding the CrossLink partnership, aiming to have a total of 650 representatives trained and integrated by the end of 2024.
APONVIE, Heron's intravenous formulation of aprepitant for the prevention of postoperative nausea and vomiting (PONV), also demonstrated strong momentum, with net revenues of $0.5 million in the first quarter of 2024, a 105% increase from the $0.2 million reported in the same period of 2023. The company's focus on refining the sales message and improving the incentive compensation plan has resulted in over 70 Pharmacy and Therapeutics (P&T) committee wins since the implementation of these changes in October 2023.
Oncology Care Portfolio Resilience
Heron's Oncology Care portfolio, consisting of CINVANTI and SUSTOL, continued to deliver consistent performance in the first quarter of 2024. CINVANTI, the company's intravenous formulation of aprepitant for the prevention of chemotherapy-induced nausea and vomiting (CINV), reported net revenues of $25.6 million, a 12% increase from the $22.8 million recorded in Q1 2023. SUSTOL, the company's extended-release injectable 5-HT3 receptor antagonist for the prevention of CINV, generated net revenues of $3.6 million, a 21% increase from the $3.0 million reported in the same period of the previous year.The resilience of the Oncology Care portfolio can be attributed to Heron's ability to maintain its market share in a competitive environment, as well as the clinical value that these products bring to healthcare providers and patients.
Guidance and Outlook
Heron Therapeutics is reaffirming its previously provided guidance for 2024, which includes revenue of $138 million to $158 million and an improved gross margin between 68% and 70%. The company's operating expenses, excluding stock-based compensation and depreciation and amortization, are anticipated to be between $108 million and $116 million, and EBITDA, excluding stock-based compensation, is expected to be between a loss of $22 million and income of $3 million.Importantly, the company believes it will achieve positive EBITDA in the fourth quarter of 2024, and based on its strong balance sheet and current operational plan, it does not anticipate the need to raise additional capital.