Heron Therapeutics, Inc. · NASDAQ:HRTX

Heron Therapeutics — J.P. Morgan Healthcare Conference 2020

64 slides from Heron Therapeutics's conference presentation, Jan 13, 2020

  1. Slide 1: Heron Therapeutics JPM Update

    Heron Therapeutics JPM Update January 13, 2020 Exhibit 99.2

  2. Slide 2: Forward-Looking Statements

    Forward-Looking Statements This presentation contains "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995. We caution investors that forward-looking statements are based on management’s expectations and assumptions as of the date of this presentation, and

  3. Slide 3: Heron Pipeline

    Heron Pipeline We are currently developing and commercializing pharmaceutical products for patients suffering from cancer or postoperative pain: SUSTOL® (granisetron) extended-release injection Fast Track and Breakthrough Therapy designations granted NDA received Priority Review; CRL received 30 Apr

  4. Slide 4: Opioid use after surgery and persistent opioid users

    $ As many as 6.5% of patients who take opioids to manage pain after surgery may become persistent opioid users.1 That equals about 2.9 MILLION PEOPLE.1 MORE THAN 50 MILLION surgical procedures happen in the United States.1 90% of patients undergoing a surgical procedure are prescribed opioids for pa

  5. Slide 5: Clinical Studies in High-Value Procedures Showed Better Pain Reduction Than Bupivacaine

    Clinical Studies in High-Value Procedures Have Demonstrated Significantly Better Pain Reduction Than Bupivacaine Procedure Annual Volume (‘000s, US) % Local Anesthetic Use Significantly Reduced Pain vs BPV† Total Procedures Inpatient Outpatient (C-code) ASC (C-Code) Medicare Non-Medicare** Survey Or

  6. Slide 6: The Commercialization of HTX-011

    The Commercialization of HTX-011 Advancing Pain Management HTX-011 is an investigational new drug and not approved by the FDA

  7. Slide 7: Established Platform With Experienced Teams in Place

    EXISTING PLATFORM ADVANTAGES Established Platform With Experienced Teams in Place We are prepared for the launch of HTX-011. Our critical teams are already in place, with extensive experience in successful hospital launches. Strong KOL relationships Successful hospital and pain management launch exp

  8. Slide 8: Heron Successfully Launched a Hospital Product Achieving >40% Market Share

    Heron has Successfully Launched a Hospital Product and Achieved >40% Market Share From Entrenched Competitor SOURCE: 867 1.8.20, IMS DDD 12.27.19 CINVANTI Hospital Share/Units Hospital share Hospital Units 528 7990 28751 51471 66774 87803 103124 118767 65% 60% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

  9. Slide 9: CINVANTI Penetration in 340B and Non-340B Hospital Market

    CINVANTI Achieved Significant Penetration in Both the 340B and Non-340B Hospital Market SOURCE: 867 1.8.20, IMS DDD 12.27.19

  10. Slide 10: Hospital Launch Analysis: HTX-011 and CINVANTI Have Similar Profiles

    CINVANTI HTX-011 Market Category NK1 - CINV Local Anesthetics Annual Units 800,000 NK1 units in hospital 14M* Brand Leader - Unit Share EMEND IV 100% EXPAREL 7% 1.0M** units Generics at Launch - Unit Share No 0% YES 93% New P&T Review Yes Yes Clinical Differentiation Yes – PS-80 free Yes – beat SOC

  11. Slide 11: The Market is Large and Waiting for an Effective Non-opioid Solution

    The Market is Large and Waiting for an Effective Non-opioid Solution Potential Target Market Target Procedures (Initial Targets) Higher-volume procedures across 4 major specialties ~6.0MOrthopedic procedures ~4.5MGeneral surgery procedures ~2.6MOB/GYN procedures ~900KPlastic surgery procedures Secon

  12. Slide 12: Local Anesthetics Grew While Opioids Declined

    Local Anesthetics grew +22% in value and +26% in pack units in 2018, while opioids declined Large increase in ropivacaine driven by increased use of nerve block to decrease need for opioids Exparel volume growth was primarily driven by the 10ml vial and limited nerve block indication Branded Product

  13. Slide 13: Shift from Inpatient to Outpatient and ASC With Pass-Through Opportunity

    Clear Shift from Inpatient (no reimbursement) to Outpatient and ASC With Opportunity for Pass-Through HTX-011 has Strategic Advantages Across All Settings of Care 52% » 47% Hospital Inpatient (6.6M procedures) Part of DRG payment Multiple SKUs - lower average cost ~50% connected 340B hospitals 39% »

  14. Slide 14: Improved Pain Management Can Move More Procedures to Outpatient Setting

    Improved Pain Management and Reduced Opioid Use with HTX-011 Can Potentially Move More Procedures to the Outpatient Setting Source: Table 14.2.13.2 *MPADSS, modified postanaesthetic discharge scoring system. The proportion of subjects who first achieve an MPADSS score ≥9 at each timepoint was analyz

  15. Slide 15: 340B and Non-340B Branded Postop Pain Medication Use

    340B + Branded Postop Pain Medication Use Inpatient Outpatient # of Hospitals Formulary Timing # Target Procedures Branded Pain Meds # Procedures Branded Pain Meds 62 0-3 200K $23M 184K $15M 201 4-8 676K $65M 624K $43M Initial Launch Focus – Fast Moving 340b Hospitals Currently Using Branded Postop

  16. Slide 16: HTX-011 Focused on the Largest Market Opportunity – Local Application

    HTX-011 is Focused on the Largest Market Opportunity – Local Application THE LARGEST OPPORTUNITY TO DRIVE VALUE AND CREATE CHANGE NB: Nerve Block N = 22M Procedures DRG Foundational Insights Research Dec. 2016 Bupivacaine lidocaine Exparel others Ropivacaine NB Bupivacaine NB

  17. Slide 17: HTX-011 Demonstrated Significant Pain Reduction in Nerve Block

    HTX-011 Demonstrated Significant Pain Reduction in Nerve Block HTX-011 Instillation has Also Demonstrated Superiority to Bupivacaine NB and Similar Pain Reduction to HTX-011 Nerve Block Study 211: Compared to Placebo, Pain Reduction with HTX-011 Instillation Approximately Triple that of Bupivacaine

  18. Slide 18: HTX-011 Significant Reduction in Opioid Use with Nerve Block and Instillation

    HTX-011 Demonstrated Significant Reduction in Opioid Use with both Nerve Block and Instillation Opioid consumption is presented in mean milligrams of morphine equivalents 3.2x Greater Opioid Reduction Than BPV Nerve Block vs PBO 2.6x Greater Opioid Reduction Than BPV Nerve Block vs PBO Study 211: Co

  19. Slide 19: Cross-Study Comparison of TKA Study to Adductor Canal Nerve Block Study

    Cross-Study Comparison of TKA Study 306 to Published Adductor Canal Nerve Block Study HTX-011 + MMA Produced Comparable or Better Pain Scores Than Nerve Block Single-Shot Adductor Canal Block (SACB) & Continuous Adductor Canal Block (CACB) with MMA1 1. Canbek, et al. https://doi.org/10.1016/j.aott.2

  20. Slide 20: Physician Raw Preference Share of 56% for HTX-011

    Physicians indicated a raw preference share of 56% for HTX-011 across the covered procedures Overall Wt. Average Preference Share Preference Share (%, Raw) 56% Raw preference share for HTX-011 from physicians: 56% The top procedures where physicians expected to use HTX-011 were knee arthroplasty and

  21. Slide 21: Adjusted Physician Preference Share Distribution

    Adjusted Physician Preference Share Distribution -44% -44% -45% Future Therapy (Applying HTX-011 preference share) Current Therapy (Actual) (e.g. lidocaine, ropivacaine, generic combo, etc.) HTX-011 Enjoyed a Physician Preference Share of 44% Current therapy based on Claims data from 2017 for Expare

  22. Slide 22: Pharmacy Directors Surveyed Prefer HTX-011 to Exparel

    Pharmacy Directors Surveyed Prefer HTX-011 to Exparel® Reference: DRG Pharmacy Director Survey (2018): Q27. What would happen to EXPAREL if Product X was approved on formulary at your institution? Impact of HTX-011 Launch on Exparel Formulary Status Most pharmacy directors indicate HTX-011 would dis

  23. Slide 23: High Procedure Volume Provides a Robust ROW Market Opportunity

    High Procedure Volume in Target Markets Provides a Robust ROW Market Opportunity Country Total Surgical Procedures Total Procedures Requiring Postop Pain Management Initial Target Procedures Remaining Secondary, Lower Volume & Procedures Currently Not Using Local Anesthetics Germany 18.6M 6.8M 4.0M

  24. Slide 24: Heron is Well Positioned to Execute a Blockbuster Launch for HTX-011

    Heron is Well Positioned to Execute a Blockbuster Launch for HTX-011 Proven track record with hospital launch success Existing robust platform and structure to support launch Significant unmet need and market opportunity Highly focused launch strategy to accelerate sales Unprecedented value proposit

  25. Slide 25: HTX-011 Development Program

    HTX-011 Development Program Advancing Pain Management HTX-011 is an investigational new drug and not approved by the FDA

  26. Slide 26: Inflammation, pH, and Local Anesthetic Failure Hypothesis

    With a pKa of 8.1, bupivacaine is sensitive to reduced pH The acidic environment associated with inflammation results in far less drug penetrating the nerve membrane and reduced anesthetic effects1,2 Local Anesthetics Exist in a Balance Between Water- and Lipid-Soluble Forms Inflammation produces an

  27. Slide 27: HTX-011 Designed to Produce Marked Analgesia Through 72 Hours in Preclinical Model

    1 Postoperative pain model in pigs from Castle et al, 2013 EPJ 2 Human dose of liposomal bupivacaine with 40% smaller incision (n=4 pigs in each arm) Increasing Analgesia 2 HTX-011 is Designed to Produce Marked Analgesia Through the First 72 Hours After Surgery as Demonstrated in this Preclinical Mo

  28. Slide 28: HTX-011 Reduces Pain Better Than Individual Components

    p=0.0154 vs. HTX-002* p<0.0001 vs. HTX-009* p=0.0208 vs. HTX-002* p=0.0005 vs. HTX-009* p=0.0333 vs. HTX-002* p=0.0090 vs. HTX-009* *p-value from ANOVA, LSMD of area under the curve for HTX-011 vs. HTX-002 or HTX-009 p=0.2041 vs. HTX-002* p<0.0035 vs. HTX-009* p=0.0592 vs. HTX-002* p<0.0042 vs. HTX-

  29. Slide 29: HTX-011 is Applied Into the Surgical Site Without a Needle

    HTX-011 is a single-dose application administered via a needle-free syringe to directly coat the affected tissue within the surgical site prior to suturing HTX-011 is Applied into the Surgical Site at the End of Surgery Without a Needle Reference: Data on file. HTX-011 is an investigational new drug

  30. Slide 30: Seven Active-Controlled Studies Showing Better Pain Reduction Than Bupivacaine

    Study Phase Surgical Model Tissue Type Significant for Pain Reduction vs. PBO Significant for Pain Reduction vs. BPV Significant Reduction in Opioid Use 202 2 Herniorrhaphy Soft ü ü ü 203 2 Abdominoplasty Soft ü ü ü 208 2 Bunionectomy Bony ü ü ü 209 2b TKA Bony ü ü ü 211 2b Breast Augmentation Soft

  31. Slide 31: EPOCH 1: Bunionectomy Results (Study 301)

    EPOCH 1: Bunionectomy Results (Study 301) EPOCH 1 Follow-on: Opioid Elimination Study in Bunionectomy

  32. Slide 32: EPOCH Bunionectomy: Superior Pain Reduction Through 72 Hours

    EPOCH 1 Bunionectomy: HTX-011 Provided Superior Pain Reduction Through 72-hours * Using Numeric Rating Scale (NRS) with window worst observation carried forward (wWOCF) Time (hour) Pain Intensity Score* (Mean ± SE) AUC0-24 HTX-011 vs P: p < 0.0001 HTX-011 vs B: p < 0.0001 AUC24-72 HTX-011 vs P: p <

  33. Slide 33: EPOCH Follow-on: HTX-011 + OTC Kept Pain in Mild Range

    EPOCH 1 Follow-on: HTX-011 + OTC Acetaminophen and Ibuprofen Kept Pain in the MiId Range Through 72 Hours HTX-011 60 mg (N=157) Saline Placebo (N=100) Bupivacaine HCI 50 mg (N=155) Severe pain ≥ 7 Mild pain (0-4) Time (hour) EPOCH 1 Follow-on: HTX-011 ≤ 60 mg + OTC (N=31) OTC = Over the counter anal

  34. Slide 34: HTX-011 Significantly Reduced Total Opioid Consumption

    HTX-011 Significantly Reduced Total Opioid Consumption 1. Based on morphine milligram equivalents p = 0.0022 p < 0.0001 Opioid Consumption (Mean MME1 ± SE) 0-72 Hours N=31 EPOCH 1 Follow-on N=100 N=155 N=157 OTC = Over the counter analgesic regimen of ibuprofen 600 mg q6h alternating 3 hours later w

  35. Slide 35: HTX-011 Significantly Increased Proportion of Opioid-Free Patients

    HTX-011 Significantly Increased Proportion of Opioid-Free Patients p = 0.0001 p < 0.0001 % Opioid-free Through 72 Hours EPOCH 1 Follow-on N=31 EPOCH 1 (Bunionectomy) N=100 N=155 N=157 OTC = Over the counter analgesic regimen of ibuprofen 600 mg q6h alternating 3 hours later with acetaminophen 1000 m

  36. Slide 36: EPOCH 2: Herniorrhaphy Results (Study 302)

    EPOCH 2: Herniorrhaphy Results (Study 302) EPOCH 2 Follow-on: Opioid Elimination Study in Herniorrhaphy

  37. Slide 37: EPOCH Herniorrhaphy: Superior Pain Reduction Through 72 Hours

    EPOCH 2 Herniorrhaphy: HTX-011 Provided Superior Pain Reduction Through 72-hours Time (hour) Mean Pain Intensity Score (SE) AUC0-24 HTX-011 vs P: p < 0.0001 HTX-011 vs B: p < 0.0001 AUC24-72 HTX-011 vs P: p = 0.0264 HTX-011 vs B: p = 0.0007 AUC0-72 HTX-011 vs P: p = 0.0004 HTX-011 vs B: p < 0.0001 S

  38. Slide 38: EPOCH Follow-on: HTX-011 + OTC Kept Pain in Mild Range

    EPOCH 2 Follow-on: HTX-011 + OTC Acetaminophen and Ibuprofen Kept Pain in the MiId Range Through 72 Hours Time (hour) Mean Pain Intensity Score (SE) HTX-011 300 mg (N=164) Saline Placebo (N=82) Bupivacaine HCI 75 mg (N=172) Source: Figure 14.2.7 HTX-011 is an investigational new drug and not approve

  39. Slide 39: HTX-011 Significantly Reduced Total Opioid Consumption

    HTX-011 Significantly Reduced Total Opioid Consumption 1. Based on morphine milligram equivalents N=82 N=172 N=164 p = 0.0240 p < 0.0001 EPOCH 2 (Herniorrhaphy) N=33 EPOCH 2 Follow-on OTC = Over the counter analgesic regimen of ibuprofen 600 mg q6h alternating 3 hours later with acetaminophen 1000 m

  40. Slide 40: HTX-011 Significantly Increased Proportion of Opioid-Free Patients

    HTX-011 Significantly Increased Proportion of Opioid-Free Patients p = 0.0486 p < 0.0001 EPOCH 2 Follow-on EPOCH 2 (Herniorrhaphy) % Opioid-free Through 72 Hours N=82 N=172 N=164 N=33 40.1% OTC = Over the counter analgesic regimen of ibuprofen 600 mg q6h alternating 3 hours later with acetaminophen

  41. Slide 41: HOPE-1: Real World Evidence of Opioid-Free Recovery

    HOPE-1: Real World Evidence of Opioid-Free Recovery Post Inguinal Herniorrhaphy with HTX-011 + OTC Analgesics

  42. Slide 42: HOPE-1: Near Total Opioid-Free Recovery with HTX-011 + OTC

    HOPE-1: Near Total Opioid-Free Recovery with HTX-011 + OTC 5% N=93 in initial pilot program 93% HTX-011 is an investigational new drug and not approved by the FDA

  43. Slide 43: Potential Reduction of Discharge Opioids Based on HOPE-1

    Potential Reduction of Discharge Opioids Based on HOPE-1 Currently, following inguinal hernia repair an average of 30 opioid pills are prescribed per patient of which an average of 9 pills are consumed1 HOPE-1 Study vs Estimated Opioid Usage With Current Practice Assumptions (n=93) Pills Prescribed

  44. Slide 44: Phase 2b TKA (Study 209) and Follow-on Study 306

    Phase 2b Total Knee Arthroplasty (TKA) (Study 209) Study 209 Follow-on: HTX-011 + MMA in TKA* (Study 306) *The multimodal analgesic (MMA) regimen used in this study was identical to the PILLAR Study of liposomal bupivacaine

  45. Slide 45: Study TKA: Results Hierarchy

    Study 209 TKA: Results Hierarchy AUC0-48 HTX-011 400 mg vs. Placebo AUC0-72 HTX-011 400 mg+ Ropivacaine vs. Placebo AUC0-48 HTX-011 400 mg + Ropivacaine vs. Placebo p < 0.0001 AUC0-72 HTX-011 400 mg vs. Placebo p = 0.0002 p < 0.0001 p = 0.0004 HTX-011 via instillation achieved primary and key second

  46. Slide 46: HTX-011 Superior Pain Reduction to Placebo and Bupivacaine Through 72 Hours

    Study 209 TKA: HTX-011 Produced Significantly Superior Pain Reduction to Both Placebo and Bupivacaine Through 72 Hours Notes: Pain intensity collected using Numeric Rating Scale (NRS) LOCF for missing data and no adjustment for use of opioid rescue medication HTX-011 is an investigational new drug a

  47. Slide 47: Follow-on: HTX-011 + Generic Analgesics Kept Pain Mild With 68% Less Opioid

    Study 209 Follow-on: HTX-011 + Generic Analgesics* Kept Pain in the MiId Range Through 72 Hours With 68% Less Opioid Than Bupivacaine HTX-011 is an investigational new drug and not approved by the FDA LOCF for missing pain data 1 4 8 * Patients received oral acetaminophen 975 to 1000 mg every 8 hour

  48. Slide 48: Cross-Study Comparison of 24-Hour Results and Exparel PILLAR Study

    Cross-Study Comparison of Day 1 in Study 306 and Exparel PILLAR Study (Dysart 2019) Cross-Study Comparison of 0 – 24 Hour Results in TKA Using Pillar-Based MMA and the Same Analysis1 Study 306 HTX-011 (N=51) PILLAR Study Exparel + Bupivacaine1 (N = 70) Bupivacaine1 (N = 69) AUC0-24 VAS Pain 2 59.5 9

  49. Slide 49: Cross-Study Comparison of 48-Hour Results and Exparel PILLAR Study

    Cross-Study Comparison of 48 Hour Results From Study 306 (Preliminary Results) and Exparel Pillar Study (Mont 2017) Comparison of 48 Hr Results in TKA Using Pillar-Based MMA and the Same Analysis1 Study 306 HTX-011 (N=51) PILLAR Study Exparel + Bupivacine1 (N = 70) Bupivacaine1 (N = 69) Mean AUC12-4

  50. Slide 50: Potential Reduction of Discharge Opioids Based on Study 306

    Potential Reduction of Discharge Opioids Based on Study 306 Currently, following TKA an average of 90 opioid pills are prescribed per patient at the time of discharge, with an additional 4 refills over the next year1 Potential Impact on Discharge Opioids of Study 306 Extrapolated to the 1,043,000 TK

  51. Slide 51: Safety Summary

    Safety Summary HTX-011 was generally well tolerated across all Phase 2 and Phase 3 studies with no clinically meaningful differences from placebo and bupivacaine in: Overall adverse events The incidence of serious adverse events Premature discontinuations due to adverse events Potential local anesth

  52. Slide 52: HTX-034 Development

    HTX-034 Development Next Generation Product for Postoperative Pain

  53. Slide 53: Inflammation From Surgery Modifies Pain Pathways and Can Produce Hyperalgesia

    Local tissue damage activates a variety of cells, which release inflammatory mediators1,2 References: 1. Woolf CJ. Pain: moving from symptom control toward mechanism-specific pharmacologic management. Ann Intern Med. 2004;140(6):441-451. 2. Basbaum AI, Bautista DM, Scherrer G, Julius D. Cellular and

  54. Slide 54: HTX-034 Produces Complete Elimination of Pain in Pig Postoperative Pain Model

    HTX-034 Produces Complete Elimination of Pain Through 7 Days in Pig Postoperative Pain Model HTX-011 & HTX-034 are investigational new drugs and not approved by the FDA This validated pig model of postoperative pain has been predictive of clinical observations with HTX-011, HTX-002 and HTX-009

  55. Slide 55: CINV Commercial Products

    CINV Commercial Products

  56. Slide 56: Heron's CINV Portfolio Achieved 2019 Net Sales of $145.7M

    With CINVANTI Leading the Way, Heron’s CINV Portfolio Achieved 2019 Net Sales of $145.7M, an 88% Increase from 2018 CINV portfolio net sales by quarter Launch of generic Emend IV in September resulted in a small decline in CINVANTI sales in 4Q Clinic-based practices are much faster to take advantage

  57. Slide 57: CINVANTI Hospital Share/Units Continued to Grow in 4Q2019

    CINVANTI – Hospital Share/Units Continued to Grow in 4Q2019 SOURCE: 867 1.8.20, IMS DDD 12.27.19

  58. Slide 58: CINVANTI Clinic Share/Units Declined in 4Q2019 Due to Emend IV Arbitrage

    CINVANTI – Clinic Share/Units Declined in 4Q2019 Due to the Emend IV Arbitrage SOURCE: 867 1.8.20, IMS DDD 12.27.19

  59. Slide 59: CINVANTI Maintains Market Leadership After Launch of EMEND IV Generics

    CINVANTI Maintains Market Leadership 15 Weeks After the Launch of Multiple EMEND IV Generics Source: IMS DDD 12.20.19

  60. Slide 60: Strategy to Preserve CINVANTI Through Generic Arbitrage

    Strategy to Preserve CINVANTI Through Generic Arbitrage Leverage favorable 340B pass through status, ASP+ 6% through 2020 IV push sNDA approved further differentiating CINVANTI from Emend and generics Practices are staying with CINVANTI due to the improved safety profile they have observed CINVANTI

  61. Slide 61: Branded ALOXI/Palonosetron Arbitrage Lasted Longer Than Projected

    Branded ALOXI/Palonosetron Arbitrage Lasted Much Longer Than Projected, Resulting in an Accelerated Decline in Sustol ASP Even with multiple generics on the market, the price of palonosetron did not drop as quickly as in past arbitrage periods Slow decline in prices resulted in a very long arbitrage

  62. Slide 62: 2020 CINV Franchise Outlook

    2020 CINV Franchise Outlook CINVANTI® Cinvanti continues to have the best overall profile compared to the other available NK1 antagonists and is completely differentiated from generic fosaprepitant with the 2-min IV Push administration CINVANTI (aprepitant) injectable emulsion received unique J-Code

  63. Slide 63: Financial Summary

    Financial Summary Summary Statement of Operations and Net Cash Used in Operations (In thousands, except per share data) Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Net product sales $ 42,624 $ 110,885 Operating expenses1 77,477 262,217 Other income, net 1,258 4,503 Net

  64. Slide 64: Key Catalysts in Pain Management & CINV Franchises

    Key Catalysts in Pain Management & CINV Franchises HTX-011 & HTX-034 for Postoperative Pain CINVANTI ® and SUSTOL® for CINV Revised NDA submitted 26 Sep 2019 addressing CRL New PDUFA date: 26 March 2020 EU MAA filing by Centralised Procedure in March 2019 Potential CHMP opinion 2Q2020 Canadian NDS s

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