HRTX - Heron stock falls ~10% as headwinds for Zynrelef label device delivery linger

2023-03-24 11:31:28 ET

Heron Therapeutics ( NASDAQ: HRTX ) stock fell ~12% on Friday despite Q4 results beat estimates as potential headwinds related to the label and the device delivery of Zynrelef lingered.

Net loss narrowed to -$19.87M, compared to -$54.65Min Q4 2021.

Net product sales grew +45.3% Y/Y to $30.03M. Both top and bottom line surpassed analysts expectations.

Pain drug Zynrelef sales increased to $3.9M, compared to $0.8M in Q4 2021.

However, Chairman and CEO Barry Quart sees slower growth of Zynrelef in Q1 2023 compared to Q4 due to decline in surgeries.

Quart said in the company's earnings call, "First quarter has started off more slowly for ZYNRELEF, due to the normal seasonal decline in surgeries in the first quarter of each year. Even with the expected decline in surgeries, we continue to see growth of ZYNRELEF, albeit at a slower pace than fourth quarter."

Heron is seeking FDA approval to expand the label for Zynrelef. However, there are concerns related to time taken to withdraw the product and for this the company plans to get approval for a new device design.

Quart said, "With the broader label expected later this year, we want to make sure the product is as easy to use as possible. Optimization will be in two steps. Step one is to complete the development and gain approval of a greatly improved custom device designed to speed the withdrawal of the product with step two being the continued development of a prefilled syringe."

The CEO added because customers indicated that they would use Zynrelef if it was easier to remove from the vial and the prefilled syringe will take a few years, the company has developed a vial access needle (VAN) which reduces the withdrawal time from minutes to about 30 seconds.

Quart pointed that prefilled syringe is the optimal presentation for Zynrelef and that the company has been working on it for several years. However, Zynrelef has proved to be "much more complicated" which has significantly lengthened the time to development.

Quart noted that the company has overcome some obstacles and were now ready to push the development project forward.

The prefilled syringes of Zynrelef are also expected to reduce the cost of goods, according to Quart.

Other metrics :

Heron Oncology Care franchise sales grew to $26.1M, compared to $19.9M in Q4 2021.

Net product sales of Cinvanti (aprepitant) injectable emulsion in Q4 increased to $23.1M, compared to $17.4M in the prior year period. Net product sales of Sustol (granisetron) extended-release injection were $3M, compared to $2.5M in Q4 2021.

Heron expects full-year 2023 net product sales for the oncology care franchise to be between $99M and $103M.

Aponvie, which is used to prevent postoperative nausea and vomiting, was commercially launched on March 6.

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