Heron Therapeutics, Inc. 2026 Q2 Earnings Call
Review the key takeaways and the transcript of this earnings call.
- Heron Therapeutics reported net revenues of $37.7 million for the second quarter of 2026, up from $34.7 million in the first quarter but slightly above $37.2 million in the prior year quarter.
- The acute care franchise grew 44% year over year, with Zynrelef sales increasing 35% and average daily units up 19% year over year.
- Upon V sales rose 74% year over year, reaching a 23% share of the surgical NK1 segment, up two points sequentially.
- Cinvanti sales were $21.8 million, up from $20.5 million in the first quarter but down about 10% year over year due to branded competition.
- Sustol continued its planned wind down with net sales of $0.5 million.
- Gross margin was 69.3%, R&D expense was $2.7 million, SG&A expense was $25.4 million, and total operating expenses were $28.1 million.
- The company reported an operating loss of $2 million and a net loss of $5.5 million, compared to a net loss of $2.4 million in the prior year quarter.
- Adjusted EBITDA was $3.2 million, up from $2.2 million in the comparable prior year quarter.
- Cash, cash equivalents, and short-term investments totaled $42.7 million at quarter end.
- Heron amended its credit facility with Hercules following a June court decision affecting Cinvanti patents, resetting covenants through 2027 and reducing principal by up to $17.5 million.
- The company paused its planned sales force expansion and tightened spending after the court decision.
- Heron filed an appeal regarding the patent decision and is preparing for potential generic competition to Cinvanti.
- The company is considering strategic alternatives but has not set a timetable or made further comments.
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Transcript
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Good day. Thank you for standing by. Welcome to the Heron Therapeutics second quarter 2026 earnings conference call. At this time, all participants are on a listen only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star one one on your telephone. You'll then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised today's conference is being recorded. I would now like to turn the conference over to speaker today. Melissa Jarel, please go ahead.
Thank you, operator. Good morning, everyone. Thank you for joining us on the Heron Therapeutics conference call today to discuss the company's financial results for the second quarter of 2026. With me today from Heron are Craig Collard, Chief Executive Officer, Ira Duarte, Executive Vice President, Chief Financial Officer, Bill Forbes, Executive Vice President, Chief Development Officer, Mark Hensley, Chief Operating Officer, and Kevin Warner, Senior Vice President, Medical Affairs Strategy and Engagement. For those of you participating via conference call, slides are made available via webcast and can also be accessed via the investor relations page of our website following the conclusion of today's call. Before we begin, let me quickly remind you that during the course of this conference call, the company will make forward-looking statements. We caution you that any statement that is not a statement of historical fact is a forward-looking statement.
This includes remarks about the company's projections, expectations, plans, beliefs, and future performance, all of which constitute forward-looking statements for the purposes of the safe harbor provision under the Private Securities Litigation Reform Act of 1995. These statements are based on judgment and analysis as of the date of this conference call and are subject to numerous important risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The risks and uncertainties associated with the forward-looking statements made in this conference call and webcast are described in the safe harbor statement in today's press release and in Heron's public periodic filings with the SEC. Except as required by law, Heron assumes no obligation to update these forward-looking statements to reflect future events or actual outcomes and does not intend to do so.
With that, I would now like to turn the call over to Craig Collard, Chief Executive Officer of Heron.
Thanks, Melissa. Hello, everyone, and welcome to Heron Therapeutics' second quarter 2026 earnings call. Net revenue for the quarter was $37.7 million. That is growth from the first quarter, but it is below what we expected of ourselves. CINVANTI sales were up compared to Q1 in a highly competitive market, and ZYNRELEF grew 35% year-over-year, but both were slower than we anticipated. Turning to slide four, let me walk through the key updates from the quarter. The acute care franchise delivered revenue growth of 44% year-over-year. ZYNRELEF grew 35%, with average daily units growing 19% year-over-year. APONVIE grew 74% year-over-year and reached 23% share of the surgical NK1 segment, up two points from the first quarter. CINVANTI came in at $21.8 million, up from $20.5 million in the first quarter.
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