10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


☐		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission file number: 001-33221

HERON THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)	94-2875566 (I.R.S. Employer Identification No.)

4242 Campus Point Court, Suite 200 San Diego, CA	92121
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (858) 251-4400

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	HRTX	The Nasdaq Capital Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☑

Non-accelerated filer	☐	Smaller reporting company	☑

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

The number of shares of the registrant’s common stock, par value $0.01 per share, outstanding as of May 2, 2024 was 150,653,158.

HERON THERAPEUTICS, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024

TABLE OF CONTENTS


PART I.	FINANCIAL INFORMATION

ITEM 1.	Condensed Consolidated Financial Statements

	Condensed Consolidated Balance Sheets as of March 31, 2024 (Unaudited) and December 31, 2023	2

	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2024 and 2023 (Unaudited)	3

	Condensed Consolidated Statements of Stockholders’ Deficit for the Three Months Ended March 31, 2024 and 2023 (Unaudited)	4

	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023 (Unaudited)	5

	Notes to Condensed Consolidated Financial Statements (Unaudited)	6

ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18

ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	25

ITEM 4.	Controls and Procedures	25

PART II.	OTHER INFORMATION

ITEM 1.	Legal Proceedings	26

ITEM 1A.	Risk Factors	26

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27

ITEM 3.	Defaults upon Senior Securities	27

ITEM 4.	Mine Safety Disclosures	27

ITEM 5.	Other Information	27

ITEM 6.	Exhibits	28

	SIGNATURES	29

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

HERON THERAPEUTICS, INC.

Condensed Consolidated Balance Sheets

(In thousands)


	March 31, 2024			December 31, 2023
	(Unaudited)			(See Note 2)
ASSETS
Current assets:
Cash and cash equivalents	$	20,450		$	28,677
Short-term investments		51,074			51,732
Accounts receivable, net		65,322			60,137
Inventory		42,473			42,110
Prepaid expenses and other current assets		6,584			6,118
Total current assets		185,903			188,774
Property and equipment, net		19,306			20,166
Right-of-use lease assets		4,794			5,438
Other assets		7,884			8,128
Total assets	$	217,887		$	222,506
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	837		$	3,240
Accrued clinical and manufacturing liabilities		19,943			22,291
Accrued payroll and employee liabilities		7,647			9,224
Other accrued liabilities		43,814			41,855
Current lease liabilities		3,137			3,075
Total current liabilities		75,378			79,685
Non-current lease liabilities		2,045			2,800
Non-current notes payable, net		24,447			24,263
Non-current convertible notes payable, net		149,542			149,490
Other non-current liabilities		241			241
Total liabilities		251,653			256,479
Stockholders’ deficit:
Common stock		1,504			1,503
Additional paid-in capital		1,873,910			1,870,525
Accumulated other comprehensive (loss)/income		(6	)		13
Accumulated deficit		(1,909,174	)		(1,906,014	)
Total stockholders’ deficit		(33,766	)		(33,973	)
Total liabilities and stockholders’ deficit	$	217,887		$	222,506

See accompanying notes.

HERON THERAPEUTICS, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(In thousands, except per share amounts)


	Three Months Ended March 31,
	2024			2023
Revenues:
Net product sales	$	34,670		$	29,615
Cost of product sales		8,444			16,854
Gross profit		26,226			12,761
Operating expenses:
Research and development		4,608			8,836
General and administrative		14,974			15,834
Sales and marketing		11,442			21,154
Total operating expenses		31,024			45,824
Loss from operations		(4,798	)		(33,063	)
Other income, net		1,638			295
Net loss		(3,160	)		(32,768	)
Other comprehensive loss:
Unrealized (losses) gains on short-term investments		(19	)		28
Comprehensive loss	$	(3,179	)	$	(32,740	)
Basic and diluted net loss per share	$	(0.02	)	$	(0.27	)
Weighted average common shares outstanding, basic and diluted		151,199			119,246

See accompanying notes.

HERON THERAPEUTICS, INC.

Condensed Consolidated Statements of Stockholders’ Deficit

(Unaudited)

(In thousands)


	Common Stock
	Shares		Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Deficit
Balance as of December 31, 2023 (audited)		150,285	$	1,503	$	1,870,525	$	13		$	(1,906,014	)	$	(33,973	)
Issuance of common stock under equity incentive plan		93		1		10		—			—			11
Stock-based compensation expense		—		—		3,375		—			—			3,375
Net loss		—		—		—		—			(3,160	)		(3,160	)
Net unrealized gains on short-term investments		—		—		—		(19	)		—			(19	)
Comprehensive loss														(3,179	)
Balance as of March 31, 2024 (unaudited)		150,378		1,504		1,873,910		(6	)		(1,909,174	)		(33,766	)


	Common Stock
	Shares		Amount		Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Deficit
Balance as of December 31, 2022 (audited)		119,155	$	1,191	$	1,807,855		$	(19	)	$	(1,795,455	)	$	13,572
Issuance of common stock under equity incentive plan		125		2		(210	)		—			—			(208	)
Stock-based compensation expense		—		—		7,947			—			—			7,947
Net loss		—		—		—			—			(32,768	)		(32,768

SEC Form 10-Q filed by Heron Therapeutics Inc.