Heron Therapeutics(US:HRTX)2025-08-08 13:30Financial Data and Key Metrics Changes - The company reported total net revenues of $37.2 million for Q2 2025 and $76.1 million year-to-date, with adjusted EBITDA of $7.9 million for the first half of the year, indicating a focus on operational efficiency [8][22] - Product gross profit for Q2 2025 was $27.3 million or 73.5%, an increase from 70.8% in Q2 2024, while year-to-date gross profit was $57.8 million or 75.9%, up from 73.2% in the same period last year [19][20] - The company incurred a net loss of $2.4 million for Q2 2025, compared to a net loss of $9.2 million in Q2 2024, and reported a net income of $300,000 for the first half of 2025, a significant improvement from a net loss of $12.4 million in the same period last year [21][22] Business Line Data and Key Metrics Changes - Combined net revenues from OPONVI and ZINRALF totaled $10.7 million for Q2 2025, reflecting a year-over-year growth of 55.5% for the quarter and 70.5% year-to-date compared to the same periods in 2024 [10][11] - Zenerlef adoption showed a 6.3% increase in demand units over Q1 2025, with total ordering accounts exceeding 700 by June [11][12] - Oponvi demand units grew by 19% in June, while net revenue grew by 9% over Q1, indicating strong market performance despite inventory adjustments [14][36] Market Data and Key Metrics Changes - The oncology franchise generated combined net revenues of $26.5 million for Q2 2025, maintaining market share in a competitive environment [16] - The transition from a C code to a permanent J code for Zenerlef, effective October 1, is expected to streamline reimbursement processes and improve access across payers [9][29] Company Strategy and Development Direction - The company successfully completed a new financing round, enhancing its financial flexibility and positioning for strategic initiatives [7] - A restructuring of the sales force was implemented to better align teams with product focus, aiming to drive growth in the second half of the year [18][43] - The company is exploring creative strategies to drive continued growth in the oncology supportive care market [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to drive innovation and expand commercial initiatives, supported by strong product demand growth [8][10] - The management noted that while immediate impacts from the J code for Zenerlef may not be seen, it is expected to facilitate reimbursement and adoption in the long term [29][48] - The company maintained its net revenue guidance of $153 million to $163 million for 2025 and revised adjusted EBITDA guidance to a range of $9 million to $13 million [22] Other Important Information - The company entered into a refinancing agreement that includes a new credit facility and the issuance of senior convertible notes, which will strengthen its balance sheet [22][23] - Cash and short-term investments as of June 30, 2025, were reported at $40.6 million [21] Q&A Session Summary Question: Details on the Zenerlef 400 mg transition and Q2 revenue impact - The transition began at the end of Q4 2024, with inventory normalization expected to complete by July 1, 2025 [26][27] Question: Impact of the J code on reimbursement and adoption - The J code is expected to simplify reimbursement processes and improve adoption over time as commercial payers align with Medicare practices [28][29] Question: Zenerlef sales force reorganization and its impact - The sales force was restructured to focus on specific products, enhancing engagement with targeted accounts [33][34] Question: Aponvi demand and revenue growth - The growth in demand was primarily due to wholesaler inventory adjustments, with expectations for normalization in the second half of the year [36][37] Question: Overall share count after recent transactions - The pro forma common share count is approximately 183 million shares [50] Question: Rate on the senior credit facility and cash addition to the balance sheet - The overall rate on the senior credit facility is slightly above 10%, with an expected addition of $11 to $12 million to the balance sheet after expenses [52][53]