Heron Therapeutics(HRTX) - 2022 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - ZYNRELEF net sales grew to $3.9 million for the fourth quarter, representing a 44% increase over the prior quarter and a 362% increase over the same quarter in the prior year [22] - Total ZYNRELEF unique ordering accounts increased to 793 by the end of the fourth quarter, up from 704 at the end of the third quarter [10] - CINV franchise net sales for the full year 2022 were $97.5 million, a 17% increase over the prior year [99] Business Line Data and Key Metrics Changes - Demand units for ZYNRELEF grew to 20,765 units in the fourth quarter, a 38% increase over the prior quarter and a 301% increase year-over-year [94] - CINVANTI manufacturing is now online, with gross margins increasing from about 50% towards 75% [12] - The oncology care team achieved a 32% increase in net sales for the CINV business compared to the same quarter in the prior year [34] Market Data and Key Metrics Changes - The company reported a branded market share growth of 9.1% in the 66 IDNs with formulary approval, which is about twice the level of the total market [23] - The elimination of separate reimbursement for generic fosaprepitant in the hospital outpatient segment has made CINVANTI's value proposition more attractive [11] - The company is targeting 36 million annual procedures in patients at moderate to high risk of PONV, with an estimated 12 million patients not receiving any prophylaxis [28] Company Strategy and Development Direction - The company is focused on expanding the label for ZYNRELEF and improving the withdrawal process from the vial to enhance growth [92][104] - APONVIE is positioned as a strategic fit for the company, leveraging existing relationships with anesthesia and pharmacy for formulary access [29] - The company aims to increase the number of surgeons using ZYNRELEF and expand into other surgical lines [50] Management's Comments on Operating Environment and Future Outlook - Management noted that the first quarter typically sees a seasonal decline in surgeries, but growth for ZYNRELEF is expected to continue despite this [20] - The company anticipates a label expansion for ZYNRELEF in October, which could drive further growth [42] - Management expressed confidence in the early customer feedback for APONVIE and the potential for significant market opportunity [33] Other Important Information - R&D expenses declined to $11.1 million in the fourth quarter of 2022, down from $28.9 million in the same quarter of 2021 [37] - The company had cash, cash equivalents, and short-term investments of $84.9 million as of December 31, 2022 [51] Q&A Session Summary Question: What is the reason for the increase in accounts receivable? - Management attributed the increase to minor timing in payments and an overall increase in sales throughout the year [39] Question: Can you elaborate on options for shoring up cash runway? - Management indicated they are working with the Board to explore options to extend the cash runway and reduce R&D expenses [60] Question: What are the overall surgical volume trends? - Management noted that January is typically slow, but they have seen good movement in February and strong March, leading to overall growth [70] Question: What is the strategy for increasing uptake from accounts with consistent ordering? - The strategy includes leveraging medical device representatives to strengthen relationships with orthopedic surgeons and ensure product availability [82] Question: What are the regulatory implications for improving ZYNRELEF's product presentation? - Management stated that they are evaluating opportunities to accelerate the approval process through a 510(k) filing, which generally goes faster [78]