Heron Therapeutics Inc (HRTX) Raises 2023 Sales Guidance and Projects Positive EBITDA in 2024
Heron Therapeutics Inc (NASDAQ:HRTX) increases full-year 2023 net product sales guidance for its oncology care franchise.
Projected full-year 2024 EBITDA (excluding stock compensation) ranges from a loss of $22 million to a gain of $3 million.
Operating expenses (excluding stock compensation and depreciation and amortization) decreased by 26% in 2023 compared to 2022.
Acute care franchise net product sales show significant year-over-year growth.
Heron Therapeutics Inc (NASDAQ:HRTX) released its 8-K filing on November 14, 2023, announcing its financial results for the third quarter of 2023 and providing updated financial guidance. The company has raised its full-year 2023 net product sales guidance for the oncology care franchise to $104 million to $106 million, up from the previous range of $99 million to $103 million. Heron Therapeutics Inc (NASDAQ:HRTX) also anticipates full-year 2023 net product sales to be between $123 million and $125 million, with a projected increase in 2024 to between $138 million and $158 million.
Financial Highlights and Corporate Updates
CEO Craig Collard expressed satisfaction with the near completion of the corporate restructuring plan, noting the company's strategic positioning to deliver substantial value in the coming years. The updated guidance reflects the growth potential of Heron's product portfolio and operational improvements. The company expects to have sufficient capital to achieve profitability, with a full-year 2024 EBITDA (excluding stock compensation) ranging from a loss of $22 million to a gain of $3 million. A cost reduction plan has been implemented, resulting in a 26% decrease in operating expenses for 2023 compared to the previous year.
Third Quarter Adjustments and Product Sales
During the third quarter of 2023, Heron Therapeutics Inc (NASDAQ:HRTX) wrote off $7.5 million in inventory related to the ZYNRELEF product launch. Excluding these write-offs, the gross profit for the quarter would have been $20.7 million, or a gross margin of approximately 66%. The company does not anticipate additional inventory write-offs in the future. One-time expenses for the quarter amounted to $4.1 million, including reorganization costs and severance charges. The loss from operations was $24.9 million for the quarter, which would have been $13.3 million excluding inventory write-offs and one-time expenses.
Product Development and Litigation Updates
The Vial Access Needle (VAN) program is on track for a Prior Approval Supplement (PAS) submission in early 2024, with an anticipated launch in the third quarter of 2024. Heron also reported a favorable outcome in the CINVANTI ANDA litigation, enforcing its patents against Fresenius Kabi.
Financial Statements Overview
The consolidated statements of operations for Heron Therapeutics Inc (NASDAQ:HRTX) show net product sales of $31.4 million for the three months ended September 30, 2023, with a gross profit of $13.2 million. The total operating expenses for the quarter were $38.2 million, leading to a loss from operations of $24.9 million. The net loss for the quarter was $25 million, or $0.17 per share. The balance sheet as of September 30, 2023, indicates that the company has cash and cash equivalents of $34.9 million and short-term investments of $42.6 million, with total assets amounting to $229.2 million.
Overall, Heron Therapeutics Inc (NASDAQ:HRTX) is navigating its financial landscape with strategic cost reductions and a focus on sales growth. The company's optimistic outlook for profitability in the coming years, supported by a robust balance sheet and a dedicated management team, positions it as a potentially attractive option for value investors.
For more detailed information, investors and interested parties are encouraged to review the full 8-K filing.
Explore the complete 8-K earnings release (here) from Heron Therapeutics Inc for further details.
This article first appeared on GuruFocus.
