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Heron Therapeutics (HRTX)
NASDAQ:HRTX

Heron Therapeutics (HRTX) AI Stock Analysis

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Heron Therapeutics

(NASDAQ:HRTX)

Rating:52Neutral
Price Target:
$2.00
▲(0.00%Upside)
Heron Therapeutics' overall score is driven by significant financial challenges, including negative profitability and cash flow issues, despite strong recent revenue growth and positive corporate governance actions. Technical indicators suggest bearish momentum, while competitive pressures remain a concern.
Positive Factors
New Product Approval
Zynrelef's recent approval of the vial access needle and potential launch of a prefilled syringe could provide near- and mid-term catalysts.
Product Differentiation
Zynrelef’s differentiated profile, 72-hour pain relief, and opioid-sparing outcomes could make it the product of choice in the post-surgical pain market.
Strong Financial Performance
HRTX shares reacted positively due to strength of the top-line and the increase in 2025 adjusted EBITDA guidance range.
Negative Factors
Financial Overhang
There is a financial overhang associated with the 2026 convertible notes, expected to be addressed in 2025.
Product Revenue Concerns
Better than expected Cinvanti and Aponvie sales offset lower than expected Zynrelef revenues.

Heron Therapeutics (HRTX) vs. SPDR S&P 500 ETF (SPY)

Heron Therapeutics Business Overview & Revenue Model

Company DescriptionHeron Therapeutics, Inc., a biotechnology company, engages in developing treatments to address unmet patient needs. The company's product candidates utilize its proprietary Biochronomer, a drug delivery technology, which delivers therapeutic levels of a range of short-acting pharmacological agents over a period from days to weeks with a single administration. It offers SUSTOL (granisetron), an extended-release injection for the prevention of acute and delayed nausea and vomiting associated with moderately emetogenic chemotherapy, or anthracycline and cyclophosphamide combination chemotherapy regimens; and CINVANTI, an intravenous formulation of aprepitant, a substance P/neurokinin-1 receptor antagonist for the prevention of acute and delayed nausea and vomiting associated with highly emetogenic cancer chemotherapy, as well as nausea and vomiting associated with moderately emetogenic cancer chemotherapy. The company is also developing ZYNRELEF, a dual-acting local anesthetic that delivers a fixed-dose combination of the local anesthetic bupivacaine and a low dose of the nonsteroidal anti-inflammatory drug meloxicam; HTX-019, an investigational agent for the prevention of postoperative nausea and vomiting; and HTX-034 for postoperative pain management, as well as is in Phase Ib/II clinical study in patients undergoing bunionectomy. The company was formerly known as A.P. Pharma, Inc. and changed its name to Heron Therapeutics, Inc. in January 2014. Heron Therapeutics, Inc. was founded in 1983 and is headquartered in San Diego, California.
How the Company Makes MoneyHeron Therapeutics generates revenue primarily through the commercialization of its pharmaceutical products. The company's revenue model is centered on the sales of its FDA-approved treatments, including non-opioid pain management solutions and supportive care products for chemotherapy-induced side effects. Key revenue streams include direct product sales in the United States and potential licensing agreements or collaborations with other pharmaceutical companies for product distribution in international markets. Strategic partnerships and alliances in research and development also play a critical role in the company's financial growth, enabling access to broader markets and shared resources.

Heron Therapeutics Earnings Call Summary

Earnings Call Date:May 06, 2025
(Q1-2025)
|
% Change Since: -6.10%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Positive
The call highlighted strong financial performance, significant growth in key product segments, and successful strategic initiatives, despite ongoing market competition and operational challenges in onboarding new accounts.
Q1-2025 Updates
Positive Updates
Significant Revenue Growth
Heron Therapeutics generated total net revenues of approximately $39 million for Q1 2025, with a record quarterly adjusted EBITDA of $6.2 million and net income of $2.6 million, highlighting a strong financial performance.
Oncology Franchise Success
Combined net revenues from CINVANTI and SUSTOL reached $28.6 million for the quarter, maintaining market share in a competitive environment and demonstrating strong product performance.
Strong Product Growth in Acute Hospital Segment
APONVIE and ZYN experienced significant growth in Q1 2025, up over 432% and 60%, respectively, compared to the same period last year, indicating strong market adoption.
Improved Financial Metrics
Product gross profit for Q1 2025 was $30.4 million or 78%, an increase from 76% in the same period in 2024, due to production efficiencies.
Revised Positive Financial Guidance
The company revised its adjusted EBITDA guidance from a range of $0 to $8 million to a range of $4 million to $12 million.
Negative Updates
High Competition
Despite maintaining market share, the oncology franchise operates in a highly competitive environment, posing ongoing challenges.
Limited ZYNRELEF Formulary Coverage
ZYNRELEF formulary status currently covers only approximately 19% of all orthopedic procedures, indicating a need for further market penetration.
Operational Challenges with Onboarding
The onboarding process for new accounts, particularly for ZYNRELEF, is time-consuming, potentially delaying sales momentum.
Company Guidance
During the Heron Therapeutics Q1 2025 earnings call, the company reported total net revenues of approximately $39 million, achieving a record quarterly adjusted EBITDA of $6.2 million and a net income of $2.6 million. The oncology franchise, including CINVANTI and SUSTOL, generated combined net revenues of $28.6 million, despite a competitive market. Heron's gross profit margin for the quarter was 78%, attributed to production efficiencies and increased sales volumes. G&A expenses decreased to $25 million from the previous year, while research and development expenses were reduced to $2.3 million. The company revised its adjusted EBITDA guidance range to $4 million to $12 million, up from the previous range of $0 to $8 million. Heron emphasized its focus on disciplined execution and optimizing commercial performance, particularly for its key products ZYNRELEF and APONVIE, which saw significant growth in Q1 2025.

Heron Therapeutics Financial Statement Overview

Summary
Heron Therapeutics shows revenue growth but struggles with profitability and financial stability. High leverage and negative equity pose financial risks, though there are slight improvements in cash flow.
Income Statement
62
Positive
Heron Therapeutics shows a positive revenue growth trajectory with a 9.47% increase in TTM revenue compared to the previous annual period. However, the company is struggling with profitability, as indicated by negative net profit and EBIT margins. The gross profit margin is relatively healthy at 69.54%, suggesting efficient cost management at the production level.
Balance Sheet
45
Neutral
The balance sheet reflects high leverage with a negative stockholders' equity, resulting in an undefined debt-to-equity ratio and a concerning financial position. The company's equity ratio is negative, indicating liabilities exceed assets, which could pose a risk. These factors highlight potential financial instability.
Cash Flow
50
Neutral
The company demonstrates a slight improvement in free cash flow, with a reduction in cash outflow by 2.21% from the previous annual period. However, operating cash flow remains negative, and the ratio of operating cash flow to net income is not favorable, suggesting ongoing cash flow challenges despite some positive movement.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
148.52M144.28M192.15M107.67M86.35M88.64M
Gross Profit
109.86M105.64M61.94M52.80M40.33M52.45M
EBIT
-3.58M-11.53M-110.61M-174.66M-217.83M-228.16M
EBITDA
2.76M-5.06M-103.79M-176.66M-215.25M-222.53M
Net Income Common Stockholders
-7.79M-13.58M-110.56M-134.52M-217.66M-224.43M
Balance SheetCash, Cash Equivalents and Short-Term Investments
50.68M59.28M80.41M84.85M157.58M208.49M
Total Assets
235.75M233.15M222.51M250.95M305.71M353.56M
Total Debt
177.26M177.76M179.63M157.48M159.50M24.61M
Net Debt
157.99M151.96M150.95M142.11M68.95M-80.53M
Total Liabilities
264.20M266.80M256.48M237.38M228.14M117.06M
Stockholders Equity
-28.45M-33.65M-33.97M13.57M77.57M236.49M
Cash FlowFree Cash Flow
-23.70M-24.23M-60.33M-148.74M-206.38M-191.63M
Operating Cash Flow
-21.88M-22.53M-58.79M-146.91M-203.35M-184.82M
Investing Cash Flow
19.71M18.71M18.00M-3.32M32.73M208.96M
Financing Cash Flow
993.00K940.00K54.11M75.06M156.03M9.11M

Heron Therapeutics Technical Analysis

Technical Analysis Sentiment
Negative
Last Price2.00
Price Trends
50DMA
2.03
Negative
100DMA
2.04
Negative
200DMA
1.86
Positive
Market Momentum
MACD
>-0.01
Negative
RSI
49.54
Neutral
STOCH
26.49
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HRTX, the sentiment is Negative. The current price of 2 is above the 20-day moving average (MA) of 1.98, below the 50-day MA of 2.03, and above the 200-day MA of 1.86, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 49.54 is Neutral, neither overbought nor oversold. The STOCH value of 26.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HRTX.

Heron Therapeutics Risk Analysis

Heron Therapeutics disclosed 55 risk factors in its most recent earnings report. Heron Therapeutics reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Heron Therapeutics Peers Comparison

Overall Rating
UnderperformOutperform
Sector (54)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
UPUPB
64
Neutral
$572.37M
54
Neutral
$5.24B3.26-44.35%6.48%16.78%-0.10%
52
Neutral
$305.13M40.36%12.43%91.67%
43
Neutral
$222.47M-152.14%22.16%-37.60%
43
Neutral
$282.16M-59.60%-100.00%31.43%
42
Neutral
$369.72M-30.10%-343.40%
42
Neutral
$389.48M-115.47%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HRTX
Heron Therapeutics
2.00
-1.18
-37.11%
TECX
Tectonic Therapeutic
19.81
3.71
23.04%
STIM
Neuronetics
3.46
1.69
95.48%
ALLO
Allogene Therapeutics
1.29
-1.32
-50.57%
ZBIO
Zenas BioPharma, Inc.
9.19
-8.78
-48.86%
UPB
Upstream Bio, Inc.
10.88
-12.50
-53.46%

Heron Therapeutics Corporate Events

Executive/Board ChangesShareholder Meetings
Heron Therapeutics Holds Annual Stockholders Meeting
Positive
Jun 18, 2025

On June 12, 2025, Heron Therapeutics held its Annual Meeting of Stockholders where key decisions were made, including the election of six directors and the ratification of Withum Smith+Brown, PC as the independent accounting firm for 2025. Stockholders also approved executive compensation for 2024 and decided to conduct annual advisory votes on executive pay, aligning with the company’s recommendations. These decisions reflect the company’s commitment to governance and transparency, potentially impacting its stakeholder relationships positively.

The most recent analyst rating on (HRTX) stock is a Buy with a $5.00 price target. To see the full list of analyst forecasts on Heron Therapeutics stock, see the HRTX Stock Forecast page.

Legal Proceedings
Heron Therapeutics Settles Patent Dispute with Mylan
Negative
May 6, 2025

On May 6, 2025, Heron Therapeutics announced a settlement agreement with Mylan Pharmaceuticals to resolve patent litigations concerning CINVANTI® and APONVIE® injectable emulsions in the U.S. District Court for the District of Delaware. As part of the settlement, Heron granted Mylan a license to market generic versions of these products in the U.S. starting June 1, 2032, or earlier under certain conditions. The litigations were initiated by Heron in response to Mylan’s applications for FDA approval of generic versions before the expiration of Heron’s patents in 2035. This agreement will lead to the dismissal of the pending litigations, potentially impacting Heron’s market exclusivity and future revenue streams.

Executive/Board ChangesBusiness Operations and Strategy
Heron Therapeutics Appoints Mark Hensley as COO
Positive
Apr 29, 2025

On April 28, 2025, Heron Therapeutics announced the appointment of Mark Hensley as Chief Operating Officer. Mr. Hensley, who has over fifteen years of experience in the pharmaceutical industry, previously held senior leadership roles at Veloxis Pharmaceuticals. His appointment is expected to play a pivotal role in Heron’s growth, with his extensive operational and leadership experience ensuring efficiency and compliance as the company advances its strategic priorities. Mr. Hensley’s compensation includes a base salary, a cash bonus, and inducement awards in the form of stock options and restricted stock units, which are designed to align his interests with the company’s performance goals.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.