HERON THERAPEUTICS, INC. The following discussion and analysis of our financial condition and results of
operations should be read together with our condensed consolidated financial
statements and related notes included in this Quarterly Report on Form 10-Q and
the audited financial statements and related notes included in our Annual Report
on Form 10-K for the year ended
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. You can identify forward-looking statements by the use of the words "believe," "expect," "anticipate," "intend," "estimate," "project," "will," "could," "should," "may," "might," "plan," "assume" and other expressions that predict or indicate future events and trends and which do not relate to historical matters. You should not rely on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, some of which are beyond our control. These risks, uncertainties and other factors may cause our actual results, performance or achievements to be materially different from our anticipated future results, performance or achievements expressed or implied by the forward-looking statements.
Factors that might cause these differences include the following:
• our ability to successfully commercialize, market and achieve market
acceptance of CINVANTI® (aprepitant) injectable emulsion ("CINVANTI"),
SUSTOL® (granisetron) extended-release injection ("SUSTOL") and our product
candidates, including HTX-011 (ZYNRELEF™ in the European Union ) and
HTX-034, and our positioning relative to competing products;
• our ability to establish satisfactory pricing and obtain adequate
reimbursement from government and third-party payors of CINVANTI, SUSTOL
and HTX-011 (ZYNRELEF in the European Union ) and HTX-034, if approved, or
any other products we may develop;
• whether study results of our products are indicative of the results in
future studies;
• the potential regulatory approval for and commercial launch of HTX-011
(ZYNRELEF in the European Union ) and HTX034;
• the potential market opportunities for CINVANTI, SUSTOL and HTX-011
(ZYNRELEF in the European Union ) and HTX-034, if approved;
• our competitors' activities, including decisions as to the timing of
competing product launches, generic entrants, pricing and discounting;
• whether safety and efficacy results of our clinical studies and other
required tests for approval of our product candidates provide data to
warrant progression of clinical trials, potential regulatory approval or
further development of any of our product candidates;
• our ability to develop, acquire and advance product candidates into, and
successfully complete, clinical studies, and our ability to submit for and
obtain regulatory approval for product candidates in our anticipated
timing, or at all;
• our ability to meet the postmarketing study requirements within the U.S.
Food and Drug Administration's ("FDA") mandated timelines and to obtain
favorable results and comply with standard postmarketing requirements,
including U.S. federal advertising and promotion laws, federal and state
anti-fraud and abuse laws, healthcare information privacy and security
laws, safety information, safety surveillance and disclosure of payments or
other transfers of value to healthcare professionals and entities for
CINVANTI, SUSTOL or any of our product candidates;
• our ability to successfully develop and achieve regulatory approval for
other future product candidates utilizing our proprietary Biochronomer®
drug delivery technology ("Biochronomer Technology");
• our ability to establish key collaborations and vendor relationships for
our products and any other future products;
• our ability to successfully develop and commercialize any technology that
we may in-license or products we may acquire;
• unanticipated delays due to manufacturing difficulties, supply constraints
or changes in the regulatory environment;
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• our ability to successfully operate in non-U.S. jurisdictions in which we
may choose to do business, including compliance with applicable regulatory
requirements and laws;
• uncertainties associated with obtaining and enforcing patents and trade
secrets to protect our products and technology, and our ability to
successfully defend ourselves against unforeseen third-party infringement
claims;
• the extent of the impact of the ongoing Coronavirus Disease 2019
("COVID-19") pandemic on our business;
• our estimates regarding our capital requirements; and
• our ability to obtain additional financing and raise capital as necessary
to fund operations or pursue business opportunities.
Any forward-looking statements in this Quarterly Report on Form 10-Q reflect our
current views with respect to future events or to our future financial
performance and involve known and unknown risks, uncertainties and other factors
that may cause our actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or
implied by these forward-looking statements. Factors that may cause actual
results to differ materially from current expectations include, among other
things, those listed under the section entitled "Risk Factors" in this Quarterly
Report on Form 10-
Overview
We are a commercial-stage biotechnology company focused on improving the lives of patients by developing best-in-class treatments to address some of the most important unmet patient needs. We are developing novel, patient-focused solutions that apply our innovative science and technologies to already-approved pharmacological agents for patients suffering from pain or cancer.
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HTX-011 (ZYNRELEF in the
HTX-034, our next-generation product candidate for postoperative pain
management, is an investigational non-opioid, fixed-dose combination,
extendedrelease solution of the local anesthetic bupivacaine, the nonsteroidal
anti-inflammatory drug meloxicam and an additional agent that further
potentiates the activity of bupivacaine. HTX-034 is formulated in the same
proprietary polymer as HTX-011 (ZYNRELEF in the
Chemotherapy-Induced Nausea and Vomiting ("CINV") Product Portfolio
SUSTOL
SUSTOL was our first commercial product. SUSTOL was approved by the FDA in
SUSTOL is indicated in combination with other antiemetics in adults for the prevention of acute and delayed nausea and vomiting associated with initial and repeat courses of moderately emetogenic chemotherapy (MEC) or anthracycline and cyclophosphamide (AC) combination chemotherapy regimens. SUSTOL is an extended-release, injectable 5-HT3 receptor antagonist that utilizes our Biochronomer Technology to maintain therapeutic levels of granisetron for ?5 days. The SUSTOL global Phase 3 development program was comprised of two, large, guideline-based clinical studies that evaluated SUSTOL's efficacy and safety in more than 2,000 patients with cancer. SUSTOL's efficacy in preventing nausea and vomiting was evaluated in both the acute phase (0-24 hours following chemotherapy) and the delayed phase (24-120 hours following chemotherapy).
SUSTOL is the first extended-release 5-HT3 receptor antagonist approved for the
prevention of acute and delayed nausea and vomiting associated with both MEC and
AC combination chemotherapy regimens. A standard of care in the treatment of
breast cancer and other cancer types, AC regimens are among the most commonly
prescribed HEC regimens, as defined by both the National Comprehensive Cancer
Network ("NCCN") and the
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CINVANTI
CINVANTI is our second commercial product. CINVANTI was approved by the FDA in
CINVANTI, in combination with other antiemetic agents, is indicated in adults for the prevention of acute and delayed nausea and vomiting associated with initial and repeat courses of highly emetogenic cancer chemotherapy (HEC) including high-dose cisplatin as a single-dose regimen, delayed nausea and vomiting associated with initial and repeat courses of moderately emetogenic cancer chemotherapy (MEC) as a single-dose regimen, and nausea and vomiting associated with initial and repeat courses of MEC as a 3-day regimen.
CINVANTI is an IV formulation of aprepitant, an NK1 receptor antagonist. CINVANTI is the first IV formulation to directly deliver aprepitant, the active ingredient in EMEND® capsules. Aprepitant (including its prodrug, fosaprepitant) is the only single-agent NK1 receptor antagonist to significantly reduce nausea and vomiting in both the acute phase (0-24 hours after chemotherapy) and the delayed phase (24-120 hours after chemotherapy). CINVANTI is the first and only IV formulation of an NK1 receptor antagonist indicated for the prevention of acute and delayed nausea and vomiting associated with HEC and nausea and vomiting associated with MEC that is free of synthetic surfactants, including polysorbate 80.
NK1 receptor antagonists are typically used in combination with 5-HT3 receptor
antagonists. The only other injectable NK1 receptor antagonist currently
approved in the
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Pain Management Product Portfolio
HTX-011 (ZYNRELEF in the
HTX-011 (ZYNRELEF in the
We submitted an NDA to the FDA for HTX-011 in
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Follow-on and Real-world Study Results
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Topline results of this study include the following:
• Mean pain scores remained in the mild range through 72 hours post-surgery.
• Median consumption of opioids was 4-to-5 pills of oxycodone (22.5 morphine
milligram equivalents) through 72 hours.
• 75% of patients were discharged from the hospital without a prescription
for opioids.
• HTX-011, together with the multimodal, oral analgesic regimen, was well
tolerated in this study. There were no deaths, serious adverse events
("SAEs") or premature discontinuations due to AEs.
In
• 77% of patients receiving HTX-011 with the OTC analgesic regimen did not
require opioids to manage their postoperative pain through 72 hours
post-surgery, compared to 29%, 11% and 2% of patients receiving HTX-011,
bupivacaine solution and placebo, respectively, in the Phase 3 study.
• 100% of patients receiving HTX-011 with the OTC analgesic regimen who were
opioid-free through 72 hours remained opioid-free through 28 days
post-surgery.
• The increase in patients who did not require opioids was associated with a
large reduction in the percentage of patients experiencing severe pain. 29%
of patients receiving HTX-011 with the OTC analgesic regimen experienced
severe pain, compared to 53%, 76% and 83% of patients receiving HTX-011,
bupivacaine solution and placebo, respectively, in the Phase 3 study.
• Over 72 hours post-surgery, patients receiving HTX-011 plus the OTC
analgesic regimen consumed an average of only 1.6 morphine milligram
equivalents ("MME"), which compares to 18.8 MME, 25.1 MME and 30.1 MME for
patients receiving HTX-011, bupivacaine solution and placebo, respectively,
in the Phase 3 study.
• HTX-011 was well tolerated with no SAEs associated with the addition of the
OTC analgesic regimen.
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• 95% of patients receiving HTX-011 with the OTC analgesic regimen did not
require opioids to manage their postoperative pain through recovery (Day
15).
• 91% of patients receiving HTX-011 with the OTC analgesic regimen were
discharged without an opioid prescription, and none of these patients
subsequently requested an opioid for postoperative pain.
• HTX-011 was well tolerated with no SAEs associated with the addition of the
OTC analgesic regimen.
• Patients indicated an overall high satisfaction with the HTX-011-based
analgesic regimen.
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• 90% of patients receiving HTX-011 with the OTC analgesic regimen did not
require opioids to manage their postoperative pain through 72 hours
post-surgery, compared to 51%, 40% and 22% of patients receiving HTX-011,
bupivacaine solution and placebo, respectively, in the Phase 3 study.
• 81% of patients receiving HTX-011 with the OTC analgesic regimen who were
opioid-free through 72 hours remained opioid-free through 28 days
post-surgery.
• Over 72 hours post-surgery, patients receiving HTX-011 plus the OTC
analgesic regimen consumed an average of only 0.9 MME, which compares to
10.8 MME, 14.5 MME and 17.5 MME for patients receiving HTX-011, bupivacaine
and placebo, respectively, in the Phase 3 study.
• HTX-011 was well tolerated with no serious adverse events associated with
the addition of the OTC analgesic regimen.
Pivotal Phase 3 Study Results
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The primary and key secondary endpoints for both Phase 3 studies were identical. The primary endpoint was pain intensity as measured by the Area Under the Curve ("AUC") 0-72 compared to placebo. Key secondary endpoints in order of evaluation were:
• comparison of AUC 0-72 of pain intensity to bupivacaine solution;
• the total amount of opioid rescue medication consumption compared to
placebo through 72 hours after surgery;
• the proportion of patients who received no opioid rescue medication after
surgery compared to bupivacaine solution; and
• the total opioid consumption through 72 hours after surgery compared to
bupivacaine.
Bunionectomy-Study 301/EPOCH 1 Results
EPOCH 1 was a randomized, placebo- and active-controlled, double-blind, Phase 3 clinical study evaluating the efficacy and safety of locally administered HTX-011 at 60 mg compared to the standard dose of bupivacaine solution (50 mg) and placebo for postoperative pain control following bunionectomy surgery in 412 subjects. All primary and key secondary endpoints were achieved:
• There was a 27% reduction in pain intensity as measured by AUC 0-72 when
comparing HTX-011 to placebo (p<0.0001);
• There was an 18% reduction in pain as measured by AUC 0-72 when comparing
HTX-011 to bupivacaine solution (p=0.0002);
• Over 72 hours post-surgery, patients receiving HTX-011 consumed 37% less
opioids than placebo patients (p<0.0001) and 25% less opioids than patients
receiving bupivacaine solution (p=0.0022); and
• 29% of patients receiving HTX-011 required no opioid medication for 72
hours post-surgery compared to only 2% receiving placebo (p<0.0001) and 11%
receiving the standard-of-care, bupivacaine solution (p=0.0001). These
results parallel the significantly reduced incidence of severe pain in
patients receiving HTX-011 compared to both placebo (36% reduction;
p<0.0001) and bupivacaine (29% reduction; p<0.0001).
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Hernia Repair-Study 302/EPOCH 2 Results
EPOCH 2 was a randomized, placebo- and active-controlled, double-blind, Phase 3 clinical study evaluating the efficacy and safety of locally administered HTX-011 at 300 mg compared to the standard dose of bupivacaine solution (75 mg) and placebo for postoperative pain control following hernia repair surgery in 418 subjects. All primary and key secondary endpoints were achieved:
• There was a 23% reduction in pain intensity as measured by AUC 0-72 when
comparing HTX-011 to placebo (p=0.0004);
• There was a 21% reduction in pain as measured by AUC 0-72 when comparing
HTX-011 to bupivacaine solution (p<0.0001);
• Over 72 hours post-surgery, patients receiving HTX-011 consumed 38% less
opioids than placebo patients (p=0.0001) and 25% less opioids than patients
receiving bupivacaine solution (p=0.0240); and
• 51% of patients receiving HTX-011 required no opioid medication for 72
hours post-surgery compared to only 22% receiving placebo (p<0.0001) and
40% receiving the standard-of-care, bupivacaine solution (p=0.0486). These
results parallel the significantly reduced incidence of severe pain in
patients receiving HTX-011 compared to both placebo (40% reduction;
p<0.0001) and bupivacaine (19% reduction; p=0.0372).
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HTX-011 was well tolerated in both Phase 3 studies, with a safety profile comparable to placebo and bupivacaine solution. There were no drug-related SAEs or discontinuations due to drug-related AEs in HTX-011-treated patients, and there were fewer opioid-related AEs in HTX-011-treated patients.
Phase 2b Study Results
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Total Knee Arthroplasty-Study 209 Results
Study 209 was a randomized, placebo- and active-controlled, double-blind, Phase 2b clinical study in patients undergoing primary unilateral TKA to evaluate the analgesic efficacy, safety and pharmacokinetics of locally administered HTX-011 into the surgical site. Following a dose-escalation phase, 222 patients were randomized to receive: (1) HTX-011 400 mg administered via instillation into the surgical site (HTX-011 alone); (2) HTX-011 400 mg administered via instillation into the surgical site with a low dose of ropivacaine injected into the posterior capsule (HTX-011 combination); (3) bupivacaine 125 mg administered via multiple injections into the surgical site; and (4) placebo. Ropivacaine and bupivacaine are generically available standard-of-care local anesthetics used in postoperative pain management. This study included a pre-specified hierarchical testing strategy for the primary and key secondary endpoints for the HTX-011 400 mg treatment groups. The primary endpoint was pain intensity as measured by the AUC from 0 to 48 hours post-surgery ("AUC 0-48") for HTX-011 compared to placebo. The key secondary endpoint was pain intensity as measured by the AUC from 0 to 72 hours post-surgery ("AUC 0-72") for HTX-011 compared to placebo. The primary and key secondary endpoints were achieved:
• The HTX-011 combination and HTX-011 alone resulted in reductions of 23% and
19%, respectively, in pain intensity measured at rest through 48 hours when
compared to placebo (p<0.0001 and p=0.0002, respectively). These pain
reductions from HTX-011 were approximately double that of bupivacaine,
which resulted in a reduction of 11%. The HTX-011 combination reduction was
significantly better than that of bupivacaine (p=0.0212).
• The HTX-011 combination and HTX-011 alone resulted in reductions of 22% and
19%, respectively, in pain intensity measured at rest through 72 hours when
compared to placebo (p<0.0001 and p=0.0004, respectively). These pain
reductions from HTX-011 were also approximately double that of bupivacaine,
which resulted in a reduction of 11%. The HTX-011 combination reduction was
significantly better than that of bupivacaine through 72 hours (p=0.0325).
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• With the more conservative assessment of pain with activity, the HTX-011
combination and HTX-011 alone resulted in reductions of 16% and 12%,
respectively, in pain intensity measured with activity through 48 hours
when compared to placebo (p<0.0001 and p=0.0017, respectively). These pain
reductions from HTX-011 were significantly better than that of bupivacaine,
which resulted in a reduction of 4% (p=0.0012 and p=0.0366, respectively).
Both the HTX-011 combination and HTX-011 alone maintained control of pain
with activity through 72 hours with a 15% (p=0.0002) and 11% (p=0.0058)
reduction compared to placebo, respectively.
• The HTX-011 combination significantly reduced opioid use through 48 and
72 hours compared to placebo (p=0.0091 and p=0.0253, respectively).
Breast Augmentation-Study 211 Results
Study 211 was a randomized, placebo- and active-controlled, double-blind, Phase 2b dose-finding study in patients undergoing augmentation mammoplasty to evaluate the analgesic efficacy, safety and pharmacokinetics of HTX-011 when administered by instillation into the surgical site or via ultrasound-guided lateral and medial pectoral nerve block before surgery. The study consisted of three cohorts comparing HTX-011 nerve block (60 mg, 120 mg, 240 mg) to the standard dose of bupivacaine 50 mg, administered as a nerve block, and placebo, and a final cohort comparing both HTX-011 400 mg administered by instillation and HTX-011 400 mg administered as a nerve block to the same two control groups. A total of 243 patients were enrolled. The primary endpoint was pain intensity as measured by the AUC from 0 to 24 hours post-surgery ("AUC 0-24") compared to placebo. The primary endpoint of the study was achieved:
• HTX-011 400 mg administered by instillation into the surgical site and
HTX-011 400 mg administered as a nerve block both resulted in reductions of
22% in pain intensity measured at rest through 24 hours when compared to
placebo (p=0.0023 and p=0.0055, respectively). These pain reductions from
HTX-011 were approximately triple that of bupivacaine administered as a
nerve block, which resulted in a reduction of 8%. The HTX-011 400 mg
instillation reduction was significantly better than that of bupivacaine
(p=0.0383).
• With the more conservative assessment of pain with activity, HTX-011 400 mg
instillation and HTX-011 400 mg nerve block resulted in reductions of 24%
and 23%, respectively, in pain intensity measured with activity through
24 hours when compared to placebo (p=0.0004 and p=0.0015, respectively).
These pain reductions from HTX-011 were approximately double that of
bupivacaine administered as a nerve block, which resulted in a reduction of
12%.
• HTX-011 400 mg instillation and HTX-011 400 mg nerve block resulted in
reductions in total opioid use of 33% and 26%, respectively, when compared
to placebo (p=0.0093 and p=0.0435, respectively). These reductions from
HTX-011 were approximately triple that of bupivacaine administered as a
nerve block, which resulted in a reduction of 10%. The HTX-011 400 mg
instillation reduction was significantly better than that of bupivacaine
(p=0.0455).
There was a strong correlation between pain reduction and the pharmacokinetics of HTX-011 in both studies.
HTX-011 was well tolerated in both Phase 2b studies, with a safety profile comparable to placebo and bupivacaine solution. There were no deaths and no clinically meaningful differences in overall AEs, SAEs, premature discontinuations due to AEs, potential local anesthetic systemic toxicity related AEs or wound healing.
Breakthrough Therapy Designation
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Fast Track Designation
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HTX-034
HTX-034, our next-generation product candidate for postoperative pain
management, is an investigational non-opioid, fixed-dose combination,
extendedrelease solution of the local anesthetic bupivacaine, the nonsteroidal
anti-inflammatory drug meloxicam and an additional agent that further
potentiates the activity of bupivacaine. HTX-034 is formulated in the same
proprietary polymer as HTX-011 (ZYNRELEF in the
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Biochronomer Technology
Our proprietary Biochronomer Technology is designed to deliver therapeutic levels of a wide range of otherwise short-acting pharmacological agents over a period from days to weeks with a single administration. Our Biochronomer Technology consists of polymers that have been the subject of comprehensive animal and human toxicology studies that have shown evidence of the safety of the polymer. When administered, the polymers undergo controlled hydrolysis, resulting in a controlled, sustained release of the pharmacological agent encapsulated within the Biochronomer-based composition. Furthermore, our Biochronomer Technology is designed to permit more than one pharmacological agent to be incorporated, such that multimodal therapy can be delivered with a single administration.
Critical Accounting Policies and Estimates
The discussion and analysis of our financial condition and results of operations
are based on our condensed consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
Our critical accounting policies include: revenue recognition, investments,
inventory, accrued clinical liabilities, income taxes, and stock-based
compensation. There have been no material changes to our critical accounting
policies and estimates disclosures included in our Annual Report on Form 10-K
for the year ended
Recent Accounting Pronouncements
See Note 3 to the condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.
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Results of Operations for the Three and Six Months Ended
Net Product Sales
Net product sales for the three and six months ended
Cost of Product Sales
For the three and six months ended
Research and Development Expense
Research and development expense consisted of the following (in thousands):
Three Months Ended Six Months Ended
June 30, June 30,
2020 2019 2020 2019
HTX-011-related costs $ 24,422 $ 23,215 $ 41,653 $ 48,447
HTX-034-related costs 1,267 1,963 2,188 2,871
CINVANTI-related costs 1,777 1,551 2,939 3,639
SUSTOL-related costs 677 697 1,556 1,184
Personnel costs and other expenses 11,180 9,565 22,594 18,498
Stock-based compensation expense 4,681 4,434 9,968 9,758
Total research and development expense
For the three months ended
For the six months ended
General and Administrative Expense
For the three months ended
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Sales and Marketing Expense
For the three and six months ended
Other Income, Net
For the three and six months ended
Liquidity and Capital Resources
As of
Our net loss for the three and six months ended
Our net cash used for operating activities for the six months ended
Our net cash provided by investing activities for the six months ended
Our net cash provided by financing activities for the six months ended
Historically, we have financed our operations, including technology and product research and development, primarily through sales of our common stock and debt financings.
Contractual Obligations
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We enter into agreements with clinical sites and clinical research organizations for the conduct of our clinical trials and contract manufacturing organizations for the manufacture and supply of preclinical, clinical and commercial materials and drug product. We make payments to these clinical sites and clinical research organizations based in part on the number of eligible patients enrolled and the length of their participation in the clinical trials and, in some cases, we are required to meet minimum purchase obligations under these agreements with contract manufacturing organizations. Under certain of these agreements, we may be subject to penalties in the event that we prematurely terminate these agreements. At this time, due to the variability associated with clinical site agreements, contract research organization agreements and contract manufacturing agreements, we are unable to estimate with certainty the future costs we will incur. We intend to use our current financial resources to fund our obligations under these commitments.
Off-Balance Sheet Arrangements
We are not involved in any "off-balance sheet arrangements" within the meaning
of the rules of the
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