Release Date: November 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Heron Therapeutics Inc (HRTX, Financial) reported a significant increase in product gross profit margin to 71% for Q3 2024, up from 42% in the same period in 2023.
- The Crosslink partnership is showing early positive results, with nearly 40,000 ZYNRELEF units ordered since April, contributing approximately $4.4 million in net revenue.
- The company has successfully integrated its business units under the One Heron initiative, leading to increased cooperation and efficiency among teams.
- CINVANTI continues to provide a strong foundational base for the company, maintaining around a 20% market share despite a competitive environment.
Negative Points
- Total acute care net revenues for the quarter were relatively low at $7.4 million, indicating room for growth.
- Net revenues for CINVANTI and [CTOL] were down from Q2, highlighting challenges in maintaining consistent sales in a competitive market.
- The company experienced a net loss of $4.8 million for Q3 2024, although this was an improvement from the previous year.
Q & A Highlights
Q: Now that VAN is approved, how should we think about the curve moving forward, and what is your anticipation of the customer mix between existing and new users?
A: Craig Collard, CEO: We anticipate having VAN in the market by the first week of December. Initially, we'll focus on a few accounts to ensure a smooth launch. We'll target accounts that previously had issues with product preparation and new accounts brought on by Crosslink. We're excited about VAN's potential to address long-standing issues like prep time and sterility.
Q: Can you comment on the nuances in the third quarter regarding the sequential decline in CINVANTI and your outlook for the fourth quarter?
A: Craig Collard, CEO: CINVANTI operates in a competitive market with fluctuations due to account changes. We lost a large account in Q3, impacting revenues. However, our "One Heron" approach is helping us gain traction, especially in 340B hospitals, and we expect a strong bounce back in Q4 and into next year.
Q: OpEx took a dip in Q3. Is this a new baseline, and do you still expect a court decision on the litigation by the end of the year?
A: Craig Collard, CEO: The OpEx dip is due to efficient management and timing, not a new baseline. Regarding litigation, we feel confident about winning the case, with a resolution expected by December 14. We anticipate a favorable outcome, extending patent protection to 2035.
Q: How much of a tailwind can the Nopain Act provide for ZYNRELEF in 2025?
A: Craig Collard, CEO: The Nopain Act, along with Crosslink and VAN, will significantly boost awareness and create a tailwind for ZYNRELEF. Being part of the opioid conversation and having the longest-acting pain relief product will enhance our market presence.
Q: Can you elaborate on the sequential revenue guidance from Q3 to Q4, particularly regarding CINVANTI's bounce back and VAN's impact on ZYNRELEF?
A: Craig Collard, CEO: CINVANTI's Q3 decline was due to account loss, but we've gained new accounts in Q4. The "One Heron" strategy is driving growth. VAN's impact will be more pronounced in Q1 2025, with current growth driven by the Crosslink partnership.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
