Q3 2025 Heron Therapeutics Inc Earnings Call
And thank you for standing by.
Welcome to the Heron Therapeutics Q3 2025 conference call.
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To withdraw your question. Please press star 1 1 again, please be advised. That today's conference is being recorded, I will now like to hand the conference over to your first Speaker today Melissa Drell executive director of legal. Please go ahead.
Thank you, operator, and hello everyone. Thank you for joining us on the hair on Therapeutics conference call today to discuss the company's Financial results for the quarter ended, September 30th 2025.
With me today from here on our Craig, Collard chief executive officer Ira darte Executive, Vice President, Chief Financial Officer, Bill Forbes, Executive, Vice President, Chief development officer Mark Hensley, Chief Operating Officer and Kevin Warner, senior vice, president medical Affairs, strategy and engagement. For those of you participating via conference. Call, slides are made available via webcast and can also be accessed via the investor relations page of our website. Following the conclusion of today's call.
Before we begin, let me quickly remind you that during the course of this conference call the company will make forward-looking statements. We caution you that any statement that is not a statement of historical fact, is a forward-looking statement
this includes remarks about the company's projections, expectations, plans, beliefs and future performance. All of which constitute forward-looking statements for the purposes of the Safe Harbor, provision under the private Securities. Litigation Reform, Act of 1995.
These statements are based on judgment and Analysis as of the date of this conference call and are subject to numerous important risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements,
the risks and uncertainties associated with the forward-looking statements made in this conference call on webcast are described in the safe harbor statement in today's press release and inherent public periodic filings with the SEC.
Required by law here on assumes. No obligation to update, these forward-looking statements to reflect future events or actual outcomes and does not intend to do so.
and with that I would now like to turn the call over to Craig Collard Chief Executive Officer of heron
Thanks Melissa.
Hello everyone and welcome to hear and Therapeutics third quarter 2025 earnings call
Today, we're thrilled to share our third quarter results and provide insight into how product sales are trending.
I'd like to begin by highlighting several key accomplishments from the quarter.
1 of the most significant Milestones was the successful completion of our financing.
This has been an overhang on the company since I joined and we're glad to have a behind us.
With this resolved management, can now fully focus on Commercial execution and product growth.
Beyond the successful financing team Herren.
Delivered. Strong operational and financial performance in the third quarter.
We generated a total net revenues of 38.2 million for the quarter and 114.3 million year to date.
This performance resulted in adjusted Eva de of 1.5 million for the quarter and 9.5 million year to date.
Our gross margin was 68.8%, which is slightly down from previous quarters. Primarily due to a 1-time write-off of Siuslaw, polymer inventory.
Sall has been trending downward over the past. Several months due to increased Market competition, and we expect this trend to continue for the foreseeable future.
Santee on the other hand continues to exceed our expectations.
We've maintained a conservative outlook this year, anticipating a potential slight decline in Santee performance as we moved into Q3 and Q4.
So far that decline has not materialized.
Despite ongoing competitive pressure that has historically impacted, our average selling price, we're pleased that net sales are remaining fairly consistent.
We believe this positive trend will continue through Q4 and into next year.
Turning to our acute care portfolio. We implemented several new initiatives in Q3, including the cross-linking night program, and incentive based initiative to improve Distributing engagement. The launch of the 200 mg vial, access needle or van,
And the creation of the IBM team, a dedicated sales force focused on a ponv. Only
That's why we've consistently stated. Our belief that the acute products will begin to inflict more prominently as we move into late Q3 and Q4 of 2025.
Zimmer left, net sales, grew 49%, in Q3 2025, as compared to Q3 2024, and upon V. Net sales, grew 173%. In that same time, period.
More importantly, we're finally seeing real momentum in the acute care.
while quarterly, net revenues, and unit demand were solid weekly unit demand from late, September through October has been the highest we've ever seen clearly indicating a possible Trend break
Mark will provide more detail on this and his prepared remarks.
Lastly, our J cofer's, interf went into effect on October 1st.
this is a significant win for Heron and for the providers who rely on zener left and their practices,
the J Code will streamline reimbursement and reduce administrative burden.
Especially as a no pain. I continues to gain traction.
We believe this change will improve access and coverage across both government and Commercial payers ultimately supporting broader adoption and better patient outcomes.
Also, our pre-filled syringe continues to advance with a timeline to possible approval in late 2027.
Bill Forbes are head of development will address any questions regarding PFS and other development initiatives.
In the Q&A.
This quarter has been both busy and successful for hearing.
With increasing demand for General life upon V and even svante.
Where extremely excited about the trajectory of the business moving forward.
I now like to turn the call over to Mark Hensley. Our chief operating officer go ahead, Mark.
Thanks Craig. In acute care. Zener left kept its momentum in the third quarter.
This is a site by sight Case by case adoption curve access enables or approved converts protocols make it stick we focused on removing friction and tightening execution.
The van made prep in the Oar easier. The ignite program kept Distributors focused on accounts. We can win our education and medical support teams, help standardize technique and support protocol adoption.
And as of October 1st, we have a permanent product-specific J Code, which makes billing conversations clear.
Stepping back. The theme is friction removal and focus.
Those same disciplines translated to both upon vience and vanty as well.
In oncology supportive care. Svante, remains a steady anchor.
As upon the expands and deepens our relationships with anesthesia and Pharmacy. We see Santee ordering rise in those hospitals.
Let me show you how this progress shows up in the revenue numbers on slide 6.
For our acute care franchise. Net sales were 12.3 million in the third quarter up from 10.7 million in the second quarter.
Zero left. Net sales were 9.3 million that is a 49% growth year-over-year versus 6.2 million in the third quarter of last year and up from 8.2 million in the second quarter.
The drivers are consistent, the van, the ignite program, focusing Distributors on winnable accounts support from our education and medical support teams and now permanent J Code clarity.
Upon vet sales were 3 million. That is 173% growth year-over-year versus 1.1 Million last year and up from 2.5 million in the second quarter.
Third quarter upon V growth occurred before the dedicated team was fully active. The team finished training in October and entered the field in early Q4 to support momentum.
Now, let me show how this demand shows up in zinder left. Operating metrics on slide 7.
Our installed base continues to expand as sites move from first case to protocol to use average daily units, increase from 882 in the third quarter last year to 1127 in the third quarter. This year, an increase of about 28%,
Ordering accounts rows from 75 to 833 over the same period.
This comes from friction removal and focus the van ignite program, our education and support teams and permanent J Code Clarity, streamlining, reimbursement.
You will also see, October plotted on the line significantly above September.
It is a preliminary single month and not a proxy for the fourth quarter, we will stay disciplined and let the quarter play out.
With that context. Let's turn to slide 8 and upon me.
Ordering accounts increased from 299 to 405.
We launched the dedicated Upon View team on July 1.
6 Representatives focused on high potential hospitals, the team completed full training in October so Q3 reflects partial deployment.
Full activation supports momentum going forward.
In addition, the 2025 ponv, prophylaxis consensus. Guidelines are expected to be published in Q4.
Upon V is anticipated to be part of the guidelines, which should significantly increase awareness of its availability and clinical profile. We look forward to aligning, our education and disseminating the information with our recently expanded field sales and Medical Teams.
Now, turning to the oncology care franchise on slide 9.
Oncology franchise, net sales were 25.9 million in the third quarter.
Santee net sales were approximately 24 million up about 6% year-over-year and stable sequentially.
As upon V broadens anesthesia and Pharmacy relationships. We are beginning to see Santee pull through in those same institutions.
Such as doll, net sales were 1.9 million down about 32% year-over-year.
We plan to wind down commercialization over the next 12 months while we evaluate potential product updates.
With a possible late 2027 reintroduction subject to development and Regulatory progress. We will continue to support customers and manage the transition responsibly.
To wrap up. We are seeing structural progress, the van, the ignite program, clinical education and permanent J Code, Clarity are turning zero left. First cases, in the durable, protocols.
Upon these Hospital. Curve continues to strengthen supported by a fully trained and strategically aligned team. Positioned ahead of the imminent. Release of the updated 2025 ponv, prophylaxis consensus guidelines.
Svante remains a stable anchor. And as upon the expands Hospital relationships, We Believe Santee will benefit.
October stepped up for zeroth, but it is a preliminary single month. We will stay disciplined and let the quarter play out.
Thanks, and I'll now turn it over to era.
Thanks Mark.
Our product growth problem.
Ended September 30th 2025 was 26.3 Million was 68.8% which decreased from 71.2% for the same period in 2024.
This decrease is due to an increase of 1.4 million of inventory, reserves and vitals recorded and an increase of 1.3 million in the cost of units, sold primarily due to supplier mix.
For the 9 months. Ended September 30th 2025 our product growth. Profit was 84.1 Million was 73.6%, which increase from 72.5% for the same period in 2024.
This increase is due to an increase in units, sold and a lower cost per unit due to the supplier mix
Sgna expenses for the 3 months and the September 30th 2025 was 26.9 Million compared to 23.3 million for the same period in 2024. The increase is primarily due to higher personnel and related expenses due to new hires and increased General Life Marketing costs.
SG&A expenses for the 9 months ending September 30th, 2025, were $78 million, compared to $77.3 million for the same period in 2024.
The increase is primarily due to increase marketing costs related to Zenith offset. By a decrease in personnel and related costs, due to terminations and a 1-time. Stock compensation expense in 2024, which did not reoccur in 2025 and a decrease in legal expenses due to timing of litigation.
Research and development expenses with 3.5 million. For the 3 months, ended September 30th 2025 compared to 4.5 million for the comparable period. In 2024, the decrease is primarily due to timing of expenses
Research and development expenses were $8.7 million for the nine months ended September 30, 2025, compared to $13.5 million for the comparable period in 2024.
The decrease is due to a decrease in personnel and related expenses, due to terminations and a decrease in write-offs of property and equipment and other assets.
For the 3 months end of September 30th 2025, we incurred a net loss of 17.5 million compared to a net loss of 4.8 million for the same period in 2024.
The increase in net loss is primarily due to the 11.3% recognized in the quarter.
Cash and Forum Investments at September 30th, 2025 was 55.5 Million.
As a result of the debt and Equity transactions completed in the 3 months end of September 30th. 2025 13.1 million was added to cash and short-term Investments,
If we had excluded depreciation, stock based compensation, and inventory reserves and vitals our adjusted, EBA results would have been a positive. 1.5 million operating income for the 3 months and it's September 30th 2025 compared to a loss of 400,000 for the same period in 2024.
For the 9 months ending September 30, 2025, our adjusted EBITDA is $9.5 million in operating income, compared to a loss of $700,000 for the same period in 2024.
We are reaffirming our previously given guidance for net revenue of 153 million to 263 million and adjusted ibida of $9 million to $30 million.
Thank you.
At this time, we will conduct the question and answer session.
As a reminder to ask a question, you need to press star111 in your telephone and wait for your name to be announced to withdraw your question. Please press star 1 1 1, again please stand by. While I compare the Q&A roster.
Our first question comes from Carl burns from Northland Capital markets, please go ahead.
Thanks for the question. Congratulations on the quarter. Uh just turning back to the slide with respect as ever loved and the first few weeks of October. Uh, it it looks like you're pushing 18% in terms of increase and and that's on a month-over-month basis. Is that correct?
Yes, Carl that's correct. It's roughly correct. Yeah, it's 17 18% right in there.
Excellent, fantastic. And then uh, Financial question if we look at gross profit margin and back out the, the 1 time stocking charge, which I think is around 2.2 million. Uh, you end up with approximately an adjusted gross profit margin, which would be around. 74.5%, does that sound correct?
That is correct Carl. Yeah that's accurate which is in line. What we've been you know for the last few quarters
Okay. And then 1 further adjustment which is the extinguishment of debt, what would the that interest income line be uh backing that out? Would that would that be somewhere in in the 2.1 million? Vicinity or what number? Should we use their
Going forward. Yeah, probably about 2 and a half million.
Would be going forward. Yeah. Okay. So 2.1 for the quarter but sort of adjusted for the 3.5. You got it. Cool perfect. Congrats again. Thank you.
Thanks Carl.
Thank you.
Our next question comes from Brandon folks from HC Wayne Wright. Please go ahead
Hi, thanks for taking my questions and congratulations on the quarter.
uh, maybe just from me, you know, understanding its very early days on the internal sales team on um,
Now, can you just talk about though how you viewing those engine on Zen relief and the Ponzi? Um, you know, and how you think about potentially adding to those teams in 2026 or sort of the
Measure of success to potentially add to those teams in 2026 and then any additional Investments, you're thinking on the commercial side behind the 2 products.
In 2026.
Thanks for the question Brandon. This is Mark Kinsley All-Star and then we'll let Craig kind of finish it up. So, you know, internally, you know, we're we're very pleased with the kind of structural changes we made at the beginning of Q3, you know. Just as a reminder we we now have a dedicated zero left team a dedicated upon V team uh that upon V team is also um, you know, beginning to do some
Some work with svante. And so, we think there's a lot of synergy there on on both sides. And so, you know, the the increased Focus, we we believe has, um, you know, is a partial, um, impact on the, the results we're seeing in the quarter and certain as we go forward, uh, into next year, you know, in addition to that, we have better alignment with our our distributor Partners. Um, and so, you know, certainly, we think all of those things being put together um, you know, will will result in in uh you know, increased sales as we go forward.
We see that type of success. We would like to obviously mimic that where we can. So, I think going forward, we continue to look for those pockets, and we're beginning, you know, as the data suggests, to see that. And so, um, we're in the process of going through our budgeting process for the year, and I think we'll be looking at where we can add in specific pockets, you know, and again, staying within profitability and so forth. But, uh, I think you're going to see more to come on that because, again, we're beginning to see a little bit of a different trend. And so, if we can expand that, we would certainly like to do that.
Fantastic. And and maybe just 1 follow up from me just um, you know on Zen relief.
And yeah, granted the demand curve look really, really good. Appreciate you sharing those. Just given the van came online. Pretty significantly in the quarter, any inventory, stocking, benefit in the revenue, in the reported Revenue line in 32 on in relief.
Uh, you know, we didn't see, you know, we had that kind of similar, um, bump when we when we launched the 400 van, you know, because the 200 Van is really only about 35% of the total sales. There, there was a minimal, um, let's say bump I guess, but but not to the degree that we saw with the 400.
So the inventory remained relatively stable can, you know, compared to to Prior quarters.
Great to have congrats on the quarter and that's all from me.
Thank you. Thanks, bro.
Thank you.
Our next question comes from Serge balangir.
From NM please. Go ahead.
Hi, good morning. Um first question regarding the no pain act. You just give us an update on its implementation and
What you're seeing from commercial plans is whether they are following in the footsteps of Medicare.
and then, uh, secondly on the oncology care franchise. Um, maybe just provide a little bit more color on your long-term outlook for for that franchise. Sounds like you expect Sue stall to remain under pressure for the foreseeable future. Um, and then on sventi, do you expect um,
Competitive pressures to uh, to come back. Despite the uh
the, the ones that didn't materialize in the third or fourth quarter, thanks
Yeah, Serge I'll uh I'll take the Saudi question then. Um, I'll pass the other over to Kevin um on the no pay 9. But again we've been, you know, saying all year long and even my prepared remarks about Santee, we felt that uh, with the, you know, the competition out there that we could see a little bit of a, a dip in Q3. And Q4 we, we have yet to see that we've been fairly consistent in being able to keep
Accounts and that type of thing. But, you know, to your point there are it is a very competitive space and we will continue to have, you know, pressure and uh, you know, we could lose the account from time to time or we could be forced to, you know, take our price down to keep an account. Um, so I mean that's just sort of the market we're in. We're going to continue to sort of look at this, pretty conservatively what I can say on the upside though, with the, um, IBM team that we have, we're beginning to promote Santee a bit more from a rep standpoint, uh, within Hospital accounts. And again, we're thinking that will have or could have a positive impact. So again, still facing the same competition. But the fact that we have a, a little bit of a larger voice out there. Uh, we've actually, uh, we had an account, we won about 3 weeks ago. That was fairly significant. And so again, if we can keep doing that, uh we think we can keep things fairly stable as we move forward. So we'll we'll continue to update, you know, quarterly. But I think our Outlook remains, you know, fairly consistent as as with things we've said before.
Yeah. Hey Serge, Kevin Warner. So in regards to the no Pay Act, and the impact we're seeing out in the fields, definitely starting to build momentum. Um, as we said previously as expected, it would take 6, 9 months, and be tail half of the year once providers and systems got educated on the fact that you could reimburse outside the bundle, and it's not typical as we know. So we're seeing education happen across all segments, um, from some of our competitors. Obviously other companies that are included in the know Pay Act, they're standing at platform presentation
Coverage, whether it's be a Medicare or a commercial plan. Uh, we have a few other things from the, the economic perspective that our Tailwind coming into 2025 for us. When you look at the teams model by CMS which is a value-based care model. So you're looking at things like patient, reported outcomes and satisfaction. So do you feel pain? Do you have ponv? That's going to be a significant Tailwind. Also, the dissolution of the inpatient only list, uh, specifically about 285, Orthopedic procedures are coming off, that inpatient only list. So that'll make them outpatient eligible procedures, now and thus reimburse under things, like the no pain neck. So, a lot of value and impact is coming to our patients and really changing the model to evaluate care. Looking for these advances, and our Healthcare System long-acting advances like in relief and upon V that can help facilitate this transition as we're moving our phases of care.
Yeah, Sergeant. Just to uh maybe address the second part of your question, regarding Seuss stall. Um, you know, similar scenario is as we face with Santi although it's just been a little bit more competitive on that side and again we have fewer accounts. And so what we've seen over the last few years we we have a we've had a continual Decline and it can continue to decline in, uh, on our ASP. And so what we've decided to do is, is wind this product down over the next, um, you know, into next year. And again, our
Plan is to look at, possibly improving the delivery of that product, whether that be a, a lighter gauge needle, or what have you. But uh, we would like to bring that out possibly late 27 back into 28, uh, as a relaunch product. And again, there's things we can do there. Um, you know, from uh, our our selling price and that type of thing that would, uh, possibly bring this product back to Market. And so, we'll talk more about that as we move forward and ideas that we have. But the plan now is to to wind this down, uh, you know, as we move to really to the end of next year.
Okay, thanks.
Thank you.
Our next question comes from Sierra Dong from Jeffrey's. Please go ahead.
Hi. Um this is Angie on for Carrara. Thank you for taking our question and congrats.
To the quarter. So my question is about the General Life prefilled syringe program, so you see, you said, um, if successful, it's, uh, expected to be approved in 2097 and based on your feedback, uh, from Physicians, um, then and how do you, how do you expect the, the prefilled syringe program to help on the franchise on the long term? And um uh how can we think of the momentum there? Thank you.
Hi, thank you for your question. This is Bill Forbes. I'll just give a little bit of an update on this. We've uh, recently just manufactured our registration batches. Uh, and with that have initiated our stability program, as you know, um, every, every new product has to undergo at least 1 year of real-time stability. So, uh, we've got that clock ticking. So we're glad we've crossed that Milestone and that's why we're looking obviously. Once we've completed that stability program, uh, we'll go ahead and file and it it, uh, will be approved. Hopefully, in, in 2027 the impact. Um, I think is is, uh, 1 that as you can see, from the van, we've had a bit of of an uptick and I think, you know, as far as as, uh, simplifying and speeding the application and use of Zen relief. The van has been a big step forward, but the pre-filled syringe takes it to another level. Obviously, in that in this scenario, we're just going to go ahead and open up the pre-filled syringe packaging and place it in the the, uh,
Surgeon's hands so that they can it can go ahead and install the product. So I think when it comes to receiving the product, it simplifies things even to even to a much greater extent. And obviously, we'll we'll speed, I believe the conversion of of, uh, accounts into use of General. I don't know if Mark has any other comments on it. No, I think that's good. Yeah, I I would just add, you know, I think Bill's spot on it. The, you know, when you
You think about Simplicity, we still have the scenario, where when we go into on board, an account, there is a training. Even though the van has improved dramatically and being able to draw the product out of the vial. And so, you know, if you think about really being able to simplify your product and now you go in and you open a tray and you dump the product into sterile field and basically it's ready to go. It it just takes 1 step out of the process. So again, we certainly think this is going to have a positive impact and, uh, uh, you know, again as as things are moving forward, uh, we think this is just makes the product, um, you know, that much better and as into the benefits. So,
The J codes were there live, it's also applicable to the profile syringe um, and also for the van, right?
Uh it would be once the pre-filled syringe is launched. Yes that's correct. Okay got it. Got it. Thank you.
Thank you. Um, this concludes the question and answer session. I will now turn it over to Craig Collard, CEO, for closing remarks.
Thank you, Robert. And, uh, thank you everyone for joining the call today. We look forward to speaking to you all next quarter.
Thank you for your participation. In today's conference, this does conclude the program. You may now disconnect