Heron Therapeutics, Inc. · NASDAQ:HRTX

Heron Therapeutics — Investor Presentation (May 2019)

80 slides from Heron Therapeutics's investor presentation, May 14, 2019

  1. Slide 1: Corporate Update May 14, 2019

    Corporate Update May 14, 2019

  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: PRECLINICAL CLINICAL NDA APPROVED SUSTOL® (granisetron) US FDA Approved for CINV Prevention* extended-release injection CINV* CINVANTI® (aprepitant) US FDA

  4. Slide 4: HTX-011 NDA Received Complete Response Letter 30 April 2019

    HTX-011 NDA for Postoperative Pain Management Received Complete Response Letter 30 April 2019 • FDA granted Priority Review to HTX-011 NDA • CRL was received 30 April 2019 – The CRL identified issues relating to CMC and non-clinical – No issues related to clinical efficacy or safety were noted • Her

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

    Postoperative Pain and its Impact on the Opioid Crisis

  6. Slide 6: The Cost of Opioids

    The Cost of Opioids How Postoperative Opioids Can Be a Doorway to Addiction As many as Of these 2.6 million persistent opioid MORE THAN 50 MILLION 6.5% users, approximately surgical procedures happen of patients who take in the United States.1 opioids to manage pain ~500,000 90% after surgery may be

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

    Heron’s Goals For Postoperative Pain Program • Our philosophy is that: 1. 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. 2. Reduction in the use of opioids should not come at the cost of patients experi

  8. Slide 8: HTX-011 Mechanism of Action

    HTX-011 ? Mechanism of ‘*% Action ae N = HERON \ THERAPEUTICS.

  9. Slide 9: Inflammation, pH, and Local Anesthetic Failure

    A Potential Hypothesis: Inflammation, pH, and Local Anesthetic Failure Local Anesthetics Exist in a Balance Between Water- and Lipid-Soluble Forms Inflammation produces an acidic environment With a one pH unit drop, 10-fold less bupivacaine is able to penetrate the nerve cell membrane • With a pKa o

  10. Slide 10: Pig Post-op Pain Model: Biochronomer Bupivacaine and Liposomal Bupivacaine

    In Pig Post-op Pain Model Both Biochronomer Bupivacaine and Liposomal Bupivacaine Showed Loss of Activity at 24 Hours Pig Postoperative Pain Model1 100 Increasing Analgesia 80 % 60 of Maximal Force (60 gm) Tolerated 40 20 0 0 1 3 5 24 48 72 96 120 144 Hours Saline Control Liposomal Bupivacaine2 Bioc

  11. Slide 11: Meloxicam Normalizes the pH Which Enables More Bupivacaine to Enter Nerves

    Meloxicam Normalizes the pH Which Enables More Bupivacaine to Enter Nerves % Increase of Un-ionized Bupivacaine 11% 289% 1218% 7.5 7.0 Tissue pH 6.5 (SEM) 6.0 5.5 5.0 24 30 48 HTX-011 (n=4) Time Post Incision (hrs) Sham Control (n=4) 11 11

  12. Slide 12: Combining Bupivacaine and Meloxicam in Biochronomer

    Combining Bupivacaine and Meloxicam in Biochronomer Produced Complete Sustained Analgesia Pig Postoperative Pain Model1 100 Increasing Analgesia 80 % 60 of Maximal Force (60 gm) Tolerated 40 20 0 0 1 3 5 24 48 72 96 120 144 Hours Saline Control Biochronomer Bupivacaine + Meloxicam 6-Day Release Lipo

  13. Slide 13: Activity of HTX-011 Cannot Be Replicated By Systemic Meloxicam

    Activity of HTX-011 Cannot Be Replicated By Systemic Administration of High-Dose Meloxicam Along With Extended Release Bupivacaine Pig Postoperative Pain Model Saline Placebo Bupivacaine ER + Meloxicam (Human dose = 30 mg daily) HTX‐011 100.0 90.0 80.0 Percent of Maximum Force Increasing Analgesia 7

  14. Slide 14: HTX-011 Reduces Pain Better Than Individual Components

    HTX-011 Reduces Pain Better Than the Individual Components in Both Bunionectomy and Herniorrhaphy 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=0.2041 vs. HTX-002* p<0.0035 vs. HTX-009* p=0.0592 v

  15. Slide 15: HTX-011 is Applied into the Surgical Site Without a Needle

    HTX-011 is Applied into the Surgical Site at the End of Surgery 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 Reference: Data on file. 15

  16. Slide 16: Seven Active-Controlled Studies Included in NDA

    Seven Active-Controlled Studies Showing Significantly Better Pain Reduction With HTX-011 Than Bupivacaine Included in NDA Significant for Significant for Significant Tissue Pain Study Phase Surgical Model Pain Reduction Reduction in Type Reduction vs. vs. PBO Opioid Use BPV 202 2 Herniorrhaphy Soft

  17. Slide 17: EPOCH 1: Bunionectomy Results

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

  18. Slide 18: EPOCH 1 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 Inpatient Period Outpatient Follow-up Period Randomization P

  19. Slide 19: EPOCH 1 Bunionectomy: All Key Endpoints Favor HTX-011

    EPOCH 1 Bunionectomy: All Key Endpoints Favor HTX-011 Hierarchical hypothesis testing (P ≤ .05) Primary NRS Pain Intensity (AUC0-72) vs placebo p < 0.0001 1st Key NRS Pain Intensity (AUC0-72) vs bupivacaine HCl p = 0.0002 Secondary 2nd Key Opioid Use (0-72 hours) vs placebo p < 0.0001 Secondary 3rd

  20. Slide 20: EPOCH 1 Bunionectomy: Superior Pain Reduction Through 72-hours

    EPOCH 1 Bunionectomy: HTX-011 Provides Superior Pain Reduction Through 72-hours 10 9 8 Saline Placebo (N=100) Severe pain (≥ 7) 7 6 Bupivacaine HCI 50 mg (N=155) Pain Intensity 5 Score* HTX-011 60 mg (N=157) (Mean ± SE) 4 3 2 AUC0-24 AUC24-72 AUC0-72 1 HTX-011 vs P: p < 0.0001 HTX-011 vs P: p < 0.00

  21. Slide 21: Epoch 1 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 10 9 8 Saline Placebo (N=100) Severe pain ≥ 7 7 6 Bupivacaine HCI 50 mg (N=155) Pain Intensity Score* 5 (Mean ± SE) HTX-011 60 mg (N=157) 4 Mild pain (0-4) 3 2 1 EPOCH 1 Follow-on: HTX-011 ≤ 60

  22. Slide 22: Significantly Fewer Patients Experience Severe Pain with HTX-011

    Significantly Fewer Patients Experience Severe Pain with HTX-011 EPOCH 1 (Bunionectomy) EPOCH 1 Follow-on 100% p < 0.0001 p < 0.0001 80% 83.0% % of 75.5% Patients with 60% Severe Pain 53.5% at Any Time (NRS ≥ 7) 40% 29.0% 20% 0% Saline Bupivacaine HCI HTX-011 HTX-011 Placebo 50 mg 60 mg ≤ 60 mg + OT

  23. Slide 23: HTX-011 Significantly Reduced Total Opioid Consumption

    HTX-011 Significantly Reduced Total Opioid Consumption EPOCH 1 (Bunionectomy) EPOCH 1 Follow-on 50 p < 0.0001 40 p = 0.0022 Opioid 30 30.1 Consumption 25.1 (Mean MME1 ± SE) 20 0-72 Hours 18.8 10 1.6 0 Saline Bupivacaine HCI HTX-011 HTX-011 Placebo 50 mg 60 mg ≤ 60 mg + OTC N=100 N=155 N=157 N=31 1.

  24. Slide 24: HTX-011 Significantly Increased Proportion of Opioid-Free Patients

    HTX-011 Significantly Increased Proportion of Opioid-Free Patients EPOCH 1 (Bunionectomy) EPOCH 1 Follow-on 100% 80% 77.4% 100% remained opioid free % through Day 28 60% Opioid-free p < 0.0001 Through 72 Hours 40% p = 0.0001 28.7% 20% 2.0% 11.0% 0% Saline Bupivacaine HTX-011 HTX-011 Placebo HCI 50 m

  25. Slide 25: HTX-011 Safety Profile Similar to Bupivacaine and Saline

    HTX-011 Safety Profile Similar to Bupivacaine and Saline Most Common AEs were Nausea, Constipation, Dizziness EPOCH 1 (Bunionectomy) EPOCH 1 Follow-on Bupivacaine Saline HCI HTX-011 HTX-011 Placebo 50 mg 60 mg ≤ 60 mg + OTC (N=101) (N=154) (N=157) (N=31) Any AE 78% 85% 83% 65% Severe AE 3% 5% 3% 0%

  26. Slide 26: EPOCH 2: Herniorrhaphy Results

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

  27. Slide 27: EPOCH 2 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 Inpatient Period Outpatient Follow-up Pe

  28. Slide 28: EPOCH 2 Herniorrhaphy: All Key Endpoints Favor HTX-011

    EPOCH 2 Herniorrhaphy: All Key Endpoints Favor HTX-011 Hierarchical hypothesis testing (P ≤ .05) Primary NRS Pain Intensity (AUC0-72) vs placebo p = 0.0004 1st Key NRS Pain Intensity (AUC0-72) vs bupivacaine HCl p < 0.0001 Secondary 2nd Key Opioid Use (0-72 hours) vs placebo p = 0.0001 Secondary 3rd

  29. Slide 29: EPOCH 2 Herniorrhaphy: Superior Pain Reduction Through 72-hours

    EPOCH 2 Herniorrhaphy: HTX-011 Provides Superior Pain Reduction Through 72-hours 10 9 8 Severe pain (≥ 7) 7 Saline Placebo (N=82) Mean 6 Bupivacaine HCI 75 mg (N=172) Pain Intensity 5 Score (SE) 4 HTX-011 300 mg (N=164) 3 2 AUC0-24 AUC24-72 AUC0-72 1 HTX-011 vs P: p < 0.0001 HTX-011 vs P: p = 0.0264

  30. Slide 30: Epoch 2 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 10 9 8 Severe pain (≥ 7) 7 Saline Placebo (N=82) Mean 6 Bupivacaine HCI 75 mg (N=172) Pain Intensity 5 Score (SE) 4 HTX-011 300 mg (N=164) 3 2 1 EPOCH 2 Follow-on: HTX-011 300 mg + OTC (N=33) Mi

  31. Slide 31: Significantly Fewer Patients Experience Severe Pain with HTX-011

    Significantly Fewer Patients Experience Severe Pain with HTX-011 EPOCH 2 (Herniorrhaphy) EPOCH 2 Follow-on 100% p < 0.0001 80% p = 0.0372 81.7% % of Patients 60% 60.5% with 48.8% Severe Pain 40% at Any Time (0-72 hours) 20% 15.2% 0% Saline Bupivacaine HCI HTX-011 HTX-011 Placebo 75 mg 300 mg 300 mg

  32. Slide 32: HTX-011 Significantly Reduced Total Opioid Consumption

    HTX-011 Significantly Reduced Total Opioid Consumption EPOCH 2 (Herniorrhaphy) EPOCH 2 Follow-on 50 40 p < 0.0001 30 Opioid p = 0.0240 Consumption 20 (Mean MME1 ± SE) 17.5 0-72 Hours 14.5 10 10.9 0.6 0 Saline Bupivacaine HCI HTX-011 HTX-011 Placebo 75 mg 300 mg 300 mg + OTC N=82 N=172 N=164 N=33 1.

  33. Slide 33: HTX-011 Significantly Increased Proportion of Opioid-Free Patients

    HTX-011 Significantly Increased Proportion of Opioid-Free Patients EPOCH 2 (Herniorrhaphy) EPOCH 2 Follow-on 100% 90.9% p < 0.0001 93% remained 80% opioid free p = 0.0486 through Day 28 % 60% Opioid-free 51.2% Through 40% 72 Hours 40.1% 20% 22.0% 0% Saline Bupivacaine HTX-011 HTX-011 Placebo HCI 75

  34. Slide 34: HTX-011 Safety Profile Similar to Bupivacaine and Saline

    HTX-011 Safety Profile Similar to Bupivacaine and Saline Most Common AEs were Nausea, Constipation, Dizziness EPOCH 2 (Herniorrhaphy) EPOCH 2 Follow-on Bupivacaine Saline HCI HTX-011 HTX-011 Placebo 75 mg 300 mg 300 mg + OTC (N=82) (N=173) (N=163) (N=33) Any AE 74% 73% 73% 36% Severe AE 2% 1% 2% 0%

  35. Slide 35: 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 35

  36. Slide 36: HOPE-1 Study Design

    HOPE-1 Study Design HTX-011 + OTC in Adult Open Inguinal Herniorrhaphy With Mesh IBP 600 mg q6hr + APAP 1000 mg q6hr, while OTC Analgesics awake for 5 days, then prn. HTX-011 Discharge Day 15 Day 29 (per site practice) (Site visit) (Site visit) at end of Surgery • Initial 93 patients treated in pilo

  37. Slide 37: HOPE-1: Near Total Opioid-Free Recovery with HTX-011 + OTC

    HOPE-1: Near Total Opioid-Free Recovery with HTX-011 + OTC Complete Opioid-Free Recovery 95% Received an Opiod Predischarge 5% Received an Opioid Prescription 9% (10 pills) Took an Opioid Post Discharge 3% (all patients had received predischarge opioid) Call Backs if Discharged Without 0% an Opiod P

  38. Slide 38: Potential Impact of HOPE-1

    Potential Impact of 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 Potential vsif Estimated Impact Opioid Usage HOPE-1 Extrapolated With~800,000 to the Current2 Practice InguinalAss

  39. Slide 39: Phase 2b Total Knee Arthroplasty (TKA) Study

    Phase 2b Total Knee Arthroplasty (TKA) Study (Study 209)

  40. Slide 40: Study 209 Phase 2b: Total Knee Arthroplasty

    Study 209 Phase 2b: Total Knee Arthroplasty HTX-011 400 mg Instillation • Pre-op Medication: acetaminophen (IV) 1 g, N = 58 pregabalin (oral) 150 mg HTX-011 400 mg Instillation, plus ropivacaine • HTX-011 Administration Technique: needle-free 50 mg injected to posterior capsule instillation of 100 m

  41. Slide 41: Study 209 TKA: Results Hierarchy

    Study 209 TKA: Results Hierarchy HTX-011 via instillation achieved primary and key secondary endpoints for reduction in pain intensity scores at rest (NRS-R) AUC0-48 HTX-011 400 mg + Ropivacaine vs. Placebo p < 0.0001 AUC0-48 HTX-011 400 mg vs. Placebo p = 0.0002 AUC0-72 HTX-011 400 mg+ Ropivacaine

  42. Slide 42: Study 209 TKA: Separation between HTX-011 Arms and Placebo

    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 42 HTX-011 is an investigational new drug and not approved by the FDA

  43. Slide 43: Study 209 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 43

  44. Slide 44: Study 209 TKA: HTX-011 Reduces Opioid Use through 72 Hours

    Study 209 TKA: HTX-011 Reduces Opioid Use through 72 Hours Opioid consumption is measured in milligram morphine equivalents (MME). Source: Figure 14.2.2.2 Percent change based on arithmetic means 44 HTX-011 is an investigational new drug and not approved by the FDA

  45. Slide 45: Exparel Pillar Study Use of Geometric Mean

    Exparel Pillar Study Use of Geometric Mean Based on Log Transformed Data for Opioid Use Misrepresents the Difference Between Arms Due to Handling of Zero Total Postsurgical Opioid With Liposomal Without Liposomal Consumption (MME) Bupivacaine Percent Decrease (N = 69) 0-24 Hours Postsurgery1 (N = 70

  46. Slide 46: Study 209 TKA: Patients Achieving Discharge Ready MPADSS Criteria

    Study 209 TKA: Significant Increase Compared to Placebo in Patients Achieving “Discharge Ready” MPADDS Criteria* with HTX-011 100% p-value vs PBO: 0.007 0.003 0.022 0.001 0.077 0.010 P-value vs BPV: 0.347 0.185 0.348 0.055 0.243 0.068 80% 60% 40% 20% 0% 0-8 0 - 12 0 - 24 Saline Placebo Bupivacaine H

  47. Slide 47: 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 toxicit

  48. Slide 48: HTX-034 Development

    HTX-034 Development Next Generation Product for Postoperative Pain

  49. Slide 49: 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 Saline Placebo Liposomal Bupivacaine HTX-011 HTX-034 (Cohort 1) HTX-034 (Cohort 2) 70.0 This validated pig model of 60.0 postoperative pain has been Withdrawal Force (g) 50.0 predictive of clinical 40.0 obse

  50. Slide 50: The Commercialization of HTX-011

    The Commercialization of HTX-011 Advancing Pain Management 50 HTX-011 is an investigational new drug and not approved by the FDA Confidential

  51. Slide 51: Established Platform With Experienced Teams in Place

    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. EXISTING PLATFORM ADVANTAGES Key Account Payer Management Strong KOL relationships Successful hospital a

  52. Slide 52: CINVANTI Accounts and Market Share Continue to Grow

    CINVANTI Accounts and Market Share Continue to Grow CINVANTI Ordering Accounts Since Launch Total Market Share 600 100% 7% 13% 22% 500 31% 80% 38% 274 400 254 242 234 60% 215 300 192 169 93% 87% 138 40% 78% 114 200 69% 80 62% 60 289 42 259 271 279 20% 225 100 26 197 215 161 175 133 152 11 108 82 0 4

  53. Slide 53: CINVANTI Market Share is Climbing Steadily Across All Segments

    CINVANTI Market Share is Climbing Steadily Across All Segments EMEND IV Total 100% 100% 93% 87% CINVANTI Launch CINVANTI (Jan 3, 2018) 80% 78% 69% 62% 60% 38% 40% 31% 22% 13% 20% 7% 0% Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 NK1 Units413 Q1’18 Q2’18 Q3’18 Q4’18 Q1’19 Total** (000s) 334 372 391 399 413 1

  54. Slide 54: Key CINVANTI Learnings to Support HTX-011 Launch

    Key CINVANTI Learnings to Support HTX-011 Launch HTX-011 KEY DRIVERS CINVANTI MOA, Superior efficacy vs. SOC DIFFERENTIATED First and only polysorbate PRODUCT 80-free NK1 RA Broad Access Pricing Lower Acquisition Cost (-$40) WAC 3-year pass through (C-Code) 340B 3- year pass through (C-Code) Top 200

  55. Slide 55: The Market is Large and Waiting for an Effective 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 Local Anesthetic Route of Delivery * ~13.5M procedures ~15.5M procedures THE LARGEST Initial Targets Secondary Targets OPPORTU

  56. Slide 56: HTX-011 is focused on the largest market opportunity

    HTX-011 is focused on the largest market opportunity Local Anesthetic Route of Delivery Local Anesthetic Volume Share Bupivacaine THE LARGEST 15% OPPORTUNITY Lidocaine All Local, 85% TO DRIVE 4% VALUE AND Exparel CREATE 53% 4% CHANGE NB, 15% Others 14% Ropivacaine NB 10% Bupivacaine NB NB: Nerve Blo

  57. Slide 57: Physicians indicated a raw preference share of 56% for HTX-011

    Physicians indicated a raw preference share of 56% for HTX-011 across the covered procedures Preference Share (%, Raw) Overall Wt. Average Preference Share Knee Arthroplasty 67% Hernia Repair - Open 67% Hernia Repair - Laparoscopic 67% Roux-en-Y Gastric Bypass 63% Hysterectomy - Laparoscopic 62% Gas

  58. Slide 58: HTX-011 Enjoyed a Physician Preference Share of 44%

    HTX-011 Enjoyed a Physician Preference Share of 44% Adjusted Physician Preference Share Distribution 14% • HTX-011 is likely to initially convert share from 25% -44% Exparel, as well as the rest of the local anesthetics Other "caines" (bupivacaine & other “caines”) (e.g. lidocaine, ropivacaine, gene

  59. Slide 59: 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, 71% 71% of physicians would advocate driven by key differentiators versus bupivacaine, including a novel MOA supported by superior pain reduction, opioid reduction, and opioid-

  60. Slide 60: Being Second to Market is NOT a Significant Obstacle

    Being Second to Market is NOT a Significant Obstacle to Commercial Success 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: • Sig

  61. Slide 61: Pharmacy Directors Prefer HTX-011 to Exparel

    Pharmacy Directors Prefer HTX-011 to Exparel® Impact of HTX-011 Launch on Formulary Status of Exparel Most pharmacy directors indicate Exparel Formulary Status vs. Expected HTX-011 Status HTX-011 would displace Exparel on formulary • Over 50% of pharmacy directors report Exparel status Not on that i

  62. Slide 62: HTX-011 has 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 Hospitals account for 91%, including Ambulatory surgical centers 13.5 top 200 IDNs (12.3M procedures) account for 8% (1.1M proced

  63. Slide 63: 340B Hospital Summary

    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 reimbur

  64. Slide 64: Comparative Reimbursement

    Comparative Reimbursement (Derived From 2/20/2019 Leerink Report) Hospital Inpatient Hospital Outpatient Hospital Inpatient Hospital Outpatient Ambulatory Surgical 340B 340B Centers (ASCs) Procedures (millions) 3.5 2.65 3.5 2.65 1.1 Procedures Mix 26.1% 19.8% 26.1% 19.8% 8.2% Heron Advantaged Due Fi

  65. Slide 65: High-Value Procedures in Initial Target Market

    High-Value Procedures in Initial Target Market Annual Volume Overall % Local (‘000s, US, 2015) Anesthetic Use Procedure Total Outpatient ASC Non- Inpatient Medicare Survey Procedures (C-code) (C-Code) Medicare Knee arthroplasty 815 721 65 28 41% 59%* 87% Hip arthroplasty 337 325 7 5 43% 57%* 81% Ort

  66. Slide 66: 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

  67. Slide 67: CINV Commercial Products

    » CINV Commercial Products \ > XQ F \ (eson \. \ _

  68. Slide 68: CINV Prophylaxis Typically Requires Two Complimentary Mechanisms of Action

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

  69. Slide 69: 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 277,000 68,694 33,530 11,759 2,756 Sancuso (2008) Akynzeo… Varubi… SUSTOL… CINVANTI (2018) Sources: IMS DDD; Heron actuals (distributor 867

  70. Slide 70: CINV Portfolio Achieved $97.5M in Net Product Sales Over Last Four Quarters

    CINV Portfolio Achieved $97.5M in Net Product Sales Over Last Four Quarters and Over $140M Since Inception CINV portfolio net sales by quarter $35 $31.6 $30 $28.8 $25 CINVANTI $19.8 Millions $20 SUSTOL $17.3 $23.4 $28.0 $15 $11.6 $11.2 $16.4 $10 $5.2 $5 $8.5 $8.6 $10.1 $6.4 $6.1 $5.4 $3.6 $3.4 $3.6

  71. Slide 71: CINVANTI Accounts and Market Share Continue to Grow

    CINVANTI Accounts and Market Share Continue to Grow CINVANTI Ordering Accounts Since Launch Total Market Share 600 100% 7% 13% 22% 500 31% 80% 38% 274 400 254 242 234 60% 215 300 192 169 93% 87% 138 40% 78% 114 200 69% 80 62% 60 289 42 259 271 279 20% 225 100 26 197 215 161 175 133 152 11 108 82 0 4

  72. Slide 72: CINVANTI Market Share is Climbing Steadily Across All Segments

    CINVANTI Market Share is Climbing Steadily Across All Segments EMEND IV Total 100% 100% 93% 87% CINVANTI Launch CINVANTI (Jan 3, 2018) 80% 78% 69% 62% 60% 38% 40% 31% 22% 13% 20% 7% 0% Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 NK1 Units413 Q1’18 Q2’18 Q3’18 Q4’18 Q1’19 Total** (000s) 334 372 391 399 413 1

  73. Slide 73: CINVANTI is Both Taking Share From Emend and Growing the NK1 Market

    CINVANTI is Both Taking Share From Emend and Growing the NK1 Market 73

  74. Slide 74: 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 • Long term contracts extending beyond September of 2019 • CINVANTI has become an established b

  75. Slide 75: Implications of USP 797 and 800 Regulations on Hospital Pharmacies

    Implications of USP 797 and 800 Regulations on Hospital Pharmacies Pharmacy Implications CINVANTI IV Push Advantages New regulations dictate need for separate preparation rooms, +ve • New regulations increase pressure room for sterile preparations and -ve pressure room for the process complexity haz

  76. Slide 76: ALOXI/Palonosetron Arbitrage Lasted Longer Than Projected

    ALOXI/Palonosetron Arbitrage Lasted Much Longer Than Projected, but It’s Finally Coming to an End! • Generic manufacturers have evolved and Palo and Ondansetron ASP over time become more disciplined on pricing to $300 maximize revenue Branded • Even with multiple generics on the $250 market, the pri

  77. Slide 77: 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 overal

  78. Slide 78: Financial Summary

    Financial Summary Heron expects to end 2019 with more than $190 million in cash, cash equivalents and short-term investments. Summary Statement of Operations and Net Cash Used in Operations Three Months Ended (In thousands, except per share data) March 31, 2019 Net product sales $ 31,602 Operating e

  79. Slide 79: Key Catalysts in Pain Management & CINV Franchises

    Key Catalysts in Pain Management & CINV Franchises CINVANTI ® and SUSTOL® for HTX-011 & HTX-034 for Postoperative Pain CINV • CRL was received 30 April 2019 • 2019 net sales guidance for  The CRL identified issues relating to CMC and non-clinical CINV franchise: $115M -  No issues related to clini

  80. Slide 80: © 2019 HERON THERAPEUTICS, INC. ALL RIGHTS RESERVED.

    © 2019 HERON THERAPEUTICS, INC. ALL RIGHTS RESERVED.

Heron Therapeutics — Investor Presentation (May 2019) on 6ix