Heron Therapeutics, Inc. · NASDAQ:HRTX

Heron Therapeutics — Corporate Update (January 2019)

71 slides from Heron Therapeutics's corporate update, Jan 7, 2019

  1. Slide 1: Corporate Update January 7, 2019

    Corporate Update January 7, 2019 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 accepted for Priority Review; PDUFA 30 Apr 20

  4. Slide 4: HTX-011 NDA for Postoperative Pain Management Has Received Priority Review

    HTX-011 NDA for Postoperative Pain Management Has Received Priority Review FDA granted Priority Review to HTX-011 NDA with a PDUFA goal date of April 30, 2019 HTX-011 received Fast Track designation in 4Q 2017 and Breakthrough Therapy designation in 2Q 2018 Fast Track and Breakthrough Therapy produc

  5. Slide 5: Postoperative Pain and its Impact on the Opioid Crisis

    Postoperative Pain and its Impact on the Opioid Crisis

  6. Slide 6: 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

  7. Slide 7: Heron's Goals For Postoperative Pain Program

    Heron’s Goals For Postoperative Pain Program Our philosophy is that: Opioids play an important role for reduction of severe pain, but should be used as a last resort, rather than the first step in pain management Reduction in the use of opioids should not come at the cost of patients experiencing mo

  8. Slide 8: HTX-011 Mechanism of Action

    HTX-011 Mechanism of Action NG NQ TN | - } \ n= Te THERAPEUTICS. *

  9. Slide 9: Bupivacaine is sensitive to reduced pH

    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 1. Hargreaves, K, Keiser, K, Local anesthetic failure in endodontics: Mechanisms and Management , En

  10. Slide 10: HTX-011 Designed to Produce Marked Analgesia Through 72 Hours (Preclinical)

    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

  11. Slide 11: HTX-011 Reduces Pain Better Than Individual Components in Phase 2 Studies

    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-

  12. Slide 12: 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.

  13. Slide 13: Seven Active-Controlled Studies Included in NDA

    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

  14. Slide 14: EPOCH 1: Bunionectomy Results (Study 301)

    HTX-011 Clinical Development EPOCH 1: Bunionectomy Results (Study 301)

  15. Slide 15: EPOCH Bunionectomy: Study Design

    EPOCH 1 (Study 301) Bunionectomy: Study Design N = 412 (3:2:3 to HTX-011 60 mg, saline placebo, or bupivacaine HCl 50 mg) 438 subjects were randomized and 412 were dosed (ITT Population) 13 sites in the United States Screening Period HTX-011 60 mg (N=157) Saline Placebo 2.1 mL (N=100) Bupivacaine HC

  16. Slide 16: EPOCH Bunionectomy: Results Hierarchy

    EPOCH 1 Bunionectomy: Results Hierarchy 1st Key Secondary: AUC0-72 HTX-011 vs. BPV 2nd Key Secondary: Opioid Consumption HTX-011 vs. PBO Primary: AUC0-72 HTX-011 vs. PBO p < 0.0001 PBO: saline placebo; BPV: bupivacaine HCl 3rd Key Secondary: Opioid-Free HTX-011 vs. BPV p = 0.0002 p < 0.0001 4th Key

  17. Slide 17: EPOCH Bunionectomy: Mean Pain Intensity

    EPOCH 1 Bunionectomy: Mean Pain Intensity Source: Figure 14.2.7 wWOCF – window worst observation carried forward HTX-011 is an investigational new drug and not approved by the FDA

  18. Slide 18: EPOCH Bunionectomy: Percentage of Subjects Opioid-Free

    EPOCH 1 Bunionectomy: Percentage of Subjects Who Are Opioid-Free Through 72 hours and Through Days 10 and 28 Percent of Patients With Severe Pain at Any Time Through 72 hours HTX-011 53.5% Saline Placebo 83.0% p<0.0001 Bupivacaine 75.5% p<0.0001 Key Secondary Endpoint HTX-011 is an investigational n

  19. Slide 19: EPOCH Bunionectomy: Opioid-Related Adverse Events

    EPOCH 1 Bunionectomy: HTX-011 Opioid-Free Subjects Have the Lowest Rate of Opioid-Related Adverse Events (ORAEs) Opioid consumption is measured in milligram morphine equivalents (MME) N for each bar: HTX-011 is an investigational new drug and not approved by the FDA

  20. Slide 20: EPOCH Bunionectomy: Benefit – Risk for HTX-011

    ← Favors Active Favors Placebo → EPOCH 1 Bunionectomy: Benefit – Risk for HTX-011 HTX-011 is an investigational new drug and not approved by the FDA

  21. Slide 21: EPOCH 2: Herniorrhaphy Results (Study 302)

    HTX-011 Clinical Development EPOCH 2: Herniorrhaphy Results (Study 302)

  22. Slide 22: EPOCH Herniorrhaphy: Study Design

    EPOCH 2 (Study 302) Herniorrhaphy: Study Design N= 418 (2:1:2 to HTX-011 300 mg, saline placebo, or bupivacaine HCl 75 mg) 446 subjects were randomized and 418 were dosed (ITT Population) 17 sites in 2 countries (United States, Belgium) Screening Period HTX-011 300 mg (N=164) Saline Placebo 10.3 mL

  23. Slide 23: EPOCH Herniorrhaphy: Results Hierarchy

    EPOCH 2 Herniorrhaphy: Results Hierarchy 1st Key Secondary: AUC0-72 HTX-011 vs. BPV 2nd Key Secondary: Opioid Consumption HTX-011 vs. PBO Primary: AUC0-72 HTX-011 vs. PBO p = 0.0004 PBO: saline placebo; BPV: bupivacaine HCl 3rd Key Secondary: Opioid-Free HTX-011 vs. BPV p < 0.0001 p = 0.0001 4th Key

  24. Slide 24: EPOCH Herniorrhaphy: Mean Pain Intensity

    EPOCH 2 Herniorrhaphy: Mean Pain Intensity Source: Figure 14.2.7 HTX-011 is an investigational new drug and not approved by the FDA

  25. Slide 25: EPOCH Herniorrhaphy: Percentage of Subjects Opioid-Free

    EPOCH 2 Herniorrhaphy: Percentage of Subjects Who Are Opioid-Free Through Day 28 Percent of Patients With Severe Pain at Any Time Through 72 hours HTX-011 48.8% Saline Placebo 81.7% p<0.0001 Bupivacaine 60.5% p=0.0372 Key Secondary Endpoint HTX-011 is an investigational new drug and not approved by

  26. Slide 26: EPOCH Herniorrhaphy: Opioid-Related Adverse Events

    EPOCH 2 Herniorrhaphy: HTX-011 Opioid-Free Subjects Have the Lowest Rate of Opioid-Related Adverse Events (ORAEs) Opioid consumption is measured in milligram morphine equivalents (MME) N for each bar: HTX-011 is an investigational new drug and not approved by the FDA

  27. Slide 27: EPOCH Herniorrhaphy: Benefit – Risk for HTX-011

    ← Favors Active Favors Placebo → EPOCH 2 Herniorrhaphy: Benefit – Risk for HTX-011 HTX-011 is an investigational new drug and not approved by the FDA

  28. Slide 28: Phase 2b Total Knee Arthroplasty (TKA) Study (Study 209)

    HTX-011 Clinical Development Phase 2b Total Knee Arthroplasty (TKA) Study (Study 209)

  29. Slide 29: Study Phase 2b: Total Knee Arthroplasty

    Study 209 Phase 2b: Total Knee Arthroplasty HTX-011 400 mg Instillation N = 58 HTX-011 400 mg Instillation, plus ropivacaine 50 mg injected to posterior capsule N = 56 Saline Placebo Injection N = 53 Bupivacaine 125 mg Injection N = 55 Pre-op Medication: acetaminophen (IV) 1 g, pregabalin (oral) 150

  30. Slide 30: 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

  31. Slide 31: Study TKA: Separation between HTX-011 Arms and Placebo Through 72 Hours

    Study 209 TKA: Significant Separation between HTX-011 Arms and Placebo through 72 Hours (Primary Endpoint) wWOCF for use of opioid rescue medication and LOCF for missing pain data HTX-011 is an investigational new drug and not approved by the FDA

  32. Slide 32: Study TKA: HTX-011 Superior to Placebo and Bupivacaine

    Study 209 TKA: HTX-011 Significantly Superior to Both Placebo and Bupivacaine Through 72 Hours Without Adjusting for Opioid Use Notes: Pain intensity collected at rest LOCF for missing data and no adjustment for use of opioid rescue medication

  33. Slide 33: Study TKA: HTX-011 Reduces Opioid Use

    Study 209 TKA: HTX-011 Reduces Opioid Use through 72 Hours Source: Figure 14.2.2.2 Opioid consumption is measured in milligram morphine equivalents (MME) HTX-011 is an investigational new drug and not approved by the FDA

  34. Slide 34: Study TKA: Increase in Patients Achieving Discharge Ready Criteria

    Study 209 TKA: Significant Increase Compared to Placebo in Patients Achieving “Discharge Ready” MPADDS Criteria* with HTX-011 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 anal

  35. Slide 35: Safety Summary

    Safety Summary HTX-011 was generally well tolerated across all Phase 2 and Phase 3 studies with no clinically meaningful differences in: Overall adverse events The incidence of serious adverse events Premature discontinuations due to adverse events Potential local anesthetic systemic toxicity (LAST)

  36. Slide 36: Opioid Elimination Study in Herniorrhaphy (Study 215)

    HTX-011 Clinical Development Phase 2 Opioid Elimination Study in Herniorrhaphy (Study 215)

  37. Slide 37: Herniorrhaphy: Pilot Opioid Elimination Study

    Study 215 Herniorrhaphy: Pilot Opioid Elimination Study Study Rationale: Pilot study to evaluate use of HTX-011 with a standard background multimodal regimen. Study Design: Treatment Cohort 1 2 Number of Subjects Dosed 33 30 HTX-011 300 mg √ √ + Preoperative oral acetaminophen (APAP) √ √ + Postopera

  38. Slide 38: HTX-011 Plus Acetaminophen and Ibuprofen Kept Pain in Mild Range

    Study 215 Herniorrhaphy: HTX-011 Plus Acetaminophen and Ibuprofen Kept Pain in the MiId Range Through 72 Hours Cohort 1: Preoperative oral APAP + Postop APAP + ibuprofen (N=33) Cohort 2: 1:Preop oral APAP + Intraoperative IV Ketorolac + Postop APAP + ibuprofen (N=30) wWOCF for use of opioid rescue m

  39. Slide 39: Herniorrhaphy: Proportion of Patients Opioid-Free

    Study 302 and Study 215 Herniorrhaphy: Proportion of Patients Opioid-Free HTX-011 is an investigational new drug and not approved by the FDA

  40. Slide 40: Herniorrhaphy: Mean Consumption of Opioid Rescue Medication

    Study 302 and Study 215 Herniorrhaphy: Mean Consumption of Opioid Rescue Medication Opioid consumption is measured in milligram morphine equivalents (MME) HTX-011 is an investigational new drug and not approved by the FDA

  41. Slide 41: Proposed Standardized Protocol for Outpatient Open Inguinal Hernia Repair

    Proposed Standardized Protocol for Outpatient Open Inguinal Hernia Repair Surgery HTX-011 at the end of surgery Scheduled acetaminophen and ibuprofen for 5 days; PRN after that For discharge 2 hours post surgery, only patients who have experienced a pain score of 6 or more should be given discharge

  42. Slide 42: HTX-034 Development: Next Generation Product for Postoperative Pain

    HTX-034 Development Next Generation Product for Postoperative Pain

  43. Slide 43: HTX-034 Produces Complete Elimination of Pain in Pig 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

  44. Slide 44: 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

  45. Slide 45: 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

  46. Slide 46: CINVANTI Rapid Adoption and One-Third Market Share

    Commercial teams achieved rapid adoption of CINVANTI and captured one-third of the market in the first 12 months of launch Source: Heron 867 data December 31 , 2018 CINVANTI Ordering Accounts Since Launch Total Market Share

  47. Slide 47: CINVANTI Execution Across Clinic and Hospital

    NK1 Units Q1’18 Q2’18 Q3’18 Q4’18 (LE) Clinic (000s) 139 158 164 164 (est) Commercial teams demonstrated the ability to execute across both clinic and hospital CINVANTI EMEND IV CINVANTI Launch (Jan 3, 2018) Total Clinic Hospital CINVANTI Launch (Jan 3, 2018) CINVANTI Launch (Jan 3, 2018) Source(s):

  48. Slide 48: Key CINVANTI Learnings to Support HTX-011 Launch

    Key CINVANTI Learnings to Support HTX-011 Launch HTX-011 MOA, Superior efficacy vs. SOC Broad Access Pricing 3-year pass through (C-Code) Top 200 IDNs Selected GPOs / IDNs Ambulatory Surgical Centers Exparel, On-Q Leverage ASCs and Outpatient for access and confidence Reduce / Eliminate Risk with AS

  49. Slide 49: The Market is Large and Waiting for a Non-opioid Solution

    The Market is Large and Waiting for an Effective Non-opioid Solution Theoretical and Target Market ~29M Annual US Surgical Procedures Requiring Postoperative Pain Management Initial Targets Higher volume procedures across 4 major specialties ~5.9M Orthopedic ~4.2M General Surgery ~2.6M OB/GYN ~0.8M

  50. Slide 50: HTX-011 is Focused on the Largest Market Opportunity

    HTX-011 is focused on the largest market opportunity THE LARGEST OPPORTUNITY TO DRIVE VALUE AND CREATE CHANGE NB: Nerve Block N = 22M Procedures DRG Foundational Insights Research Dec. 2016

  51. Slide 51: Physician Raw Preference Share 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

  52. Slide 52: Adjusted Physician Preference Share Distribution

    Adjusted Physician Preference Share Distribution -6% -32% -5% Future Therapy (Applying HTX-011 preference share) Current Therapy (Actual) (e.g. lidocaine, ropivacaine, generic combo, etc.) Current therapy based on Claims data from 2017 for Exparel, other agents are based on 2018 Physician Survey Dat

  53. Slide 53: Customers Value HTX-011's Superior Product Profile

    Customers Value HTX-011’s Superior Product Profile Highly favorable feedback from both physicians and pharmacy directors, driven by key differentiators versus bupivacaine, including a novel MOA supported by superior pain reduction, opioid reduction, and opioid-free endpoints High preference shares a

  54. Slide 54: Exparel is a Small Obstacle to HTX-011 Uptake

    Exparel® is a small obstacle to HTX-011 uptake as its penetration is less than 6% Across product attributes, surgeons and pharmacy directors surveyed consistently prefer HTX-011 over Exparel for the following reasons: Significant reduction in severe pain resulting in significant increase in opioid-f

  55. Slide 55: Pharmacy Directors 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? Pharmacy Directors Prefer HTX-011 to Exparel® Impact of HTX-011 Launch on Exparel Formulary Status Most pharmacy directors indicate HTX-011 would displace Exp

  56. Slide 56: HTX-011 Strategic Advantages Across Each Setting of Care

    HTX-011 has Strategic Advantages Across Each Setting of Care Clearly differentiated strategy supported by building advocacy with pharmacy, surgeons, and anesthesiologists 52% Hospital Inpatient (7M procedures) Part of DRG payment 3 SKUs/lower average cost ~50% connected 340B hospitals 39% Hospital O

  57. Slide 57: 340B Hospital Summary

    ~2258 hospitals (excluding children’s & psych) Perform 8.4M outpatient surgeries 4.4M inpatient surgeries/year Manufacturers required to provide 23.1% discount off ASP/WAC Discount does not impact ASP or best price calculations Effective January 1, 2018, CMS reimbursement to hospitals for 340B drugs

  58. Slide 58: High-Value Procedures in Initial Target Market

    High-Value Procedures in Initial Target Market Procedure Annual Volume (‘000s, US, 2015) Overall % Local Anesthetic Use Total Procedures Inpatient Outpatient (C-code) ASC (C-Code) Medicare Non-Medicare Survey Ortho Surgery Knee arthroplasty 815 721 65 28 41% 59%* 87% Hip arthroplasty 337 325 7 5 43%

  59. Slide 59: Heron 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

  60. Slide 60: CINV Commercial Products

    ® ~ CINV Commercial oe Products nad | . o ° | X Ch - N NOL esc \

  61. Slide 61: CINV Prophylaxis Typically Requires Two Complementary Mechanisms of Action

    CINV Prophylaxis Typically Requires Two Complimentary Mechanisms of Action NK1 receptor antagonists Substance P is primary driver of delayed CINV, but related to ~15% of acute failures EMEND® IV (fosaprepitant), which has 90% share of the US NK1 market, contains the synthetic surfactant polysorbate

  62. Slide 62: Heron's CINV Portfolio Outperforms All CINV Branded Launches

    Heron’s CINV Portfolio Continues to Outperform All CINV Branded Launches in Past 10 Years First 12 Months of Sales for All CINV Brand Launches in Last 10 Years Sources: IMS DDD; Heron actuals (distributor 867 reports); due to data availability, Sancuso data includes actuals for launch months 3-12 an

  63. Slide 63: CINV Portfolio Achieved $76.7M in Net Product Sales in 2018

    CINV Portfolio Achieved $76.7M in Net Product Sales in 2018 and Over $100M Since Inception CINV portfolio net sales by quarter

  64. Slide 64: CINVANTI Accounts and Market Share Continue to Grow

    CINVANTI Accounts and Market Share Continue to Grow Source: Heron 867 data December 31 , 2018 CINVANTI Ordering Accounts Since Launch Total Market Share

  65. Slide 65: CINVANTI Market Share is Climbing Steadily Across All Segments

    NK1 Units Q1’18 Q2’18 Q3’18 Q4’18 (LE) Clinic (000s) 139 158 164 164 (est) CINVANTI Market Share is Climbing Steadily Across All Segments CINVANTI EMEND IV CINVANTI Launch (Jan 3, 2018) Factors influencing further share growth: Unique J code Jan 2019 Long tail of use (30-40% of use is in hundreds of

  66. Slide 66: Strategy to Preserve CINVANTI Through Generic Arbitrage

    Strategy to preserve CINVANTI through generic arbitrage Leverage favorable 340B pass through status, ASP+ 6% through 2020 Potential Q1 2019 label expansion to include IVP further differentiating CINVANTI from Emend and generics Long term contracts extending beyond September of 2019 CINVANTI has beco

  67. Slide 67: Palonosetron Arbitrage Lasting Longer Than Ondansetron Arbitrage

    * Ondansetron launch aligned ALOXI/Palonosetron Arbitrage is Lasting Much Longer Than the Zofran/Ondansetron Arbitrage Branded Generic manufacturers have evolved and become more disciplined on pricing to maximize revenue Even with multiple generics on the market, the price of palonosetron has not dr

  68. Slide 68: 2019 CINV Franchise Outlook

    2019 CINV Franchise Outlook SUSTOL®: While we expect to see sales of SUSTOL slowly improve, the core business will continue to be weak during the protracted palonosetron arbitrage CINVANTI® We expect to see steady growth in the marketplace through mid-year due to what we believe is the best overall

  69. Slide 69: 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, 2018 Nine Months Ended September 30, 2018 Net product sales $ 19,786 $ 48,630 Operating expenses1 61,566 181,253 Other income, net 3,434 3,342 Net

  70. Slide 70: 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 FDA accepted NDA Priority Review Designation PDUFA date April 30, 2019 No Advisory Committee planned 2018 net sales: $76.7M 2018 net sales guidance for CINV: $60M - $70M raised

  71. Slide 71: ALL RIGHTS RESERVED.

    © 2019 HERON THERAPEUTICS, INC. ALL RIGHTS RESERVED.

Heron Therapeutics — Corporate Update (January 2019) on 6ix