Heron Therapeutics, Inc. · NASDAQ:HRTX

Heron Therapeutics — Investor Presentation (March 2018)

55 slides from Heron Therapeutics's investor presentation, March 2018

  1. Slide 1: Company Update March 2018

    a RA [T1E=IROWN ~ THERAPEUTICS Developing Best-in-Class Medicine. Improving Lives.” Company Update March 2018

  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: Status of Product Portfolio

    Status of Product Portfolio CINV Pain Preclinical Clinical NDA Approved SUSTOL® (granisetron) extended- Approved by U.S. Food and Drug Administration release injection CINVANTI™ (aprepitant) injectable Approved by U.S. Food and Drug Administration emulsion HTX-011 bupivacaine + • Fast Track designat

  4. Slide 4: CINV Commercial Products

    [T1E=IROWN THERAPEUTICS Developing Best-in-Class Medicine. Improving Lives.” »CINV Commercial Products

  5. Slide 5: The Management of CINV Remains a Significant Clinical Challenge

    The Management of CINV Remains a Significant Clinical Challenge > In the U.S., over 1 million people receive CINV therapy each year Unmet Need  Despite treatment with previously available therapies, many patients 2.4 Million patients receive cancer treatment experience breakthrough CINV particularl

  6. Slide 6: Large Percentage of Patients Experience Breakthrough CINV

    Despite Previously Available Therapies, a Large Percentage of Patients Experience Breakthrough CINV % of MEC/HEC patients with breakthrough CINV despite % of MEC/HEC patients with breakthrough CINV despite prophylaxis prophylaxis Community practice observational study Physician perception 70% Percen

  7. Slide 7: CINV Has a High Clinical Burden

    CINV Has a High Clinical Burden – Impacting Patients’ QOL and Cancer Treatment Patients identified CINV as the side effect of chemotherapy CINV commonly disrupts patients’ cancer they most wanted to avoid treatment More acceptable Worst 1.00 Constipation Sexual dysfunction Depression Mucositis Fatig

  8. Slide 8: 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

  9. Slide 9: Only Company with Two Single-Agent Products for Acute and Delayed CINV

    Heron Therapeutics Is the Only Company with Two Single-Agent Products Approved for Prevention of Acute and Delayed CINV Acute phase Cisplatin Cyclophosphamide/carboplatin Intensity of Emesis Delayed phase 0 1 2 3 4 5 Days 5-HT3 NK1 9

  10. Slide 10: SUSTOL Outperformed ALL Recent CINV New Brand Launches

    SUSTOL® Outperformed ALL Recent CINV New Brand Launches CINV New Brand Launches Since 2008 Administrations in First 12 Months (launch aligned) 80,000 70,000 68,694 60,000 50,000 40,000 30,000 33,530 20,000 10,000 2,756 11,759 0 Sancuso (2008) Akynzeo (2014) Varubi (2015) SUSTOL (2016) Sources: IMS D

  11. Slide 11: SUSTOL Net Revenue Up 16% to $10 Million in Q4

    SUSTOL® Net Revenue Up 16% to $10 Million in Q4 Over 100,000 Units of SUSTOL Sold to Practices in 2017 Full Year 2017 Net Revenue Was Approximately $31M SUSTOL Quarterly Unit Performance 40.0 (Provider Demand) 35.0 35.0 30.0 28.6 26.4 25.0 Units (000's) 20.0 15.0 10.3 10.0 5.0 3.3 0.0 Q4 2016 Q1 201

  12. Slide 12: Market Insights Suggest SUSTOL May Decline Modestly Through the Arbitrage

    Market Insights Suggest SUSTOL® May Decline Modestly Through the Arbitrage and Grow Thereafter – Consistent with Aloxi® Analogue Recent Market Insights Unit Sales 700,000 • Practices that are converting to SUSTOL are likely to maintain use1 600,000 • ~67% of current “dabblers” likely to stop or redu

  13. Slide 13: CINVANTI Now Launched

    CINVANTI™ Now Launched • CINVANTI™ is the first and only IV NK1 receptor antagonist approved for the prevention of both acute and delayed CINV that is free of synthetic surfactants, including polysorbate 80-free CINVANTI™ is indicated in adults, in combination with other antiemetic agents, for the p

  14. Slide 14: Despite an NCCN Category 1 Recommendation, NK1s are Underutilized

    Despite an NCCN Category 1 Recommendation, NK1’s are Underutilized Percent of Patients Receiving NCCN Antiemetic Guidelines NK1 Therapy 100% HEC MEC 80% 60%  5-HT3  5-HT3  dexamethasone  dexamethasone 40% 69%  NK1 ± NK1 20% ± olanzapine ± olanzapine 17% 0% NCCN 2017 HEC MEC IPSOS “US Tandem Onc

  15. Slide 15: Aprepitant Has Provided Trusted Efficacy for CINV Prevention

    Aprepitant Has Provided Trusted Efficacy for CINV Prevention for Nearly 15 Years Aprepitant is the only single-agent Overview of Aprepitant NK1 that: • Is FDA-approved for prevention of CINV in both acute and delayed FDA approved 2003 phases • Can be administered to patients receiving chemotherapy r

  16. Slide 16: CINVANTI Is the First and Only IV NK1 Free of Synthetic Surfactants

    CINVANTI™ Is the First and Only IV NK1 Approved for the Prevention of Both Acute and Delayed CINV That is Free of Synthetic Surfactants, Including Polysorbate 80-Free CINVANTI™ IV EMEND® IV Varubi® IV aprepitant emulsion fosaprepitant rolapitant Indicated for prevention of both acute and delayed CIN

  17. Slide 17: CINVANTI Was Well Tolerated Given as an Infusion or IV Push

    CINVANTI ® Was Well Tolerated Given as an Infusion or as an IV Push CINVANTI Produced Fewer TEAEs Within 30 Minutes of Infusion CINVANTI Was Well Tolerated When Given by Both 30-minute Infusion Than EMEND IV1 and 2-minute IV Push2 20% 20.0% Treatment Emergent Adverse Event EMEND IV 150 mg (n=200) CI

  18. Slide 18: CINVANTI Adds a Second Best-In-Class Therapy in a ~3.6M Unit Market

    With CINVANTI™, Heron Adds a Second Best-In-Class Therapy to Compete in a Branded CINV Market with ~3.6M Annual Units Leading Branded CINV Products (Annual Units) 1.31M 2.33M Aloxi® Emend IV® Source: IMS TTM Q3’17 18

  19. Slide 19: 2018 CINV Franchise Outlook

    2018 CINV Franchise Outlook SUSTOL®: We continue to expect core SUSTOL business to hold firm and with possibility of modest decline during arbitrage and growth thereafter • Even with the potential for generic palonosetron, 4th quarter unit sales grew 22% • Approximately $31M in net product sales in

  20. Slide 20: Postoperative Pain Program

    Postoperative Pain Program HTX-011: Proprietary Extended-Release Combination of Bupivacaine + Meloxicam

  21. Slide 21: Postoperative Opioids: A Doorway to Addiction

    Postoperative Opioids: A Doorway to Addiction As many as MORE THAN 40 MILLION patients undergoing surgical procedures are 2.6 MILLION PEOPLE >600,000 prescribed opioids for pain management that take will become addicted to opioids. in the United States every year opioids to manage pain after surgery

  22. Slide 22: Market Is Large but Current Extended Release Anesthetics Have Not Fulfilled the Promise

    Market Is Large and Local Anesthetic Use Is Common, but Current Extended Release Anesthetics Have Not Fulfilled the Promise of Long-Acting Pain Relief Procedures Requiring Postoperative Local Anesthetic Usage Across Key Limiters of Liposomal Pain Relief, 2015-20201 Key Surgeries, 20151* Bupivacaine

  23. Slide 23: Surgeons Expect to Use Less Opioids and More Long-Acting Local Anesthetics

    Surgeons Expect to Use Less Opioids and More Long-Acting Local Anesthetics as Better Options Become Available Future Pain Market Outlook 72% of surgeons expect to use 62% of surgeons expect to use more Chart Title 73% of surgeons expect to use more fewer opioids local anesthetics long-acting local a

  24. Slide 24: Large US Market Opportunity

    Large US Market Opportunity Theoretical and Target Market ~28M Annual US Surgical Procedures Requiring Postoperative Pain Management ($7.0 – 8.4B) ~15M procedures ~6M procedures ~7M procedures Initial Targets Secondary Targets Tertiary Targets Higher volume procedures across 4 major specialties High

  25. Slide 25: High Procedure Volume Provides a Robust ROW Market Opportunity

    High Procedure Volume in Target Markets Provides a Robust ROW Market Opportunity Remaining Secondary, Lower Total Procedures Requiring Total Surgical Procedures Initial Target Procedures Volume & Procedures Currently Postop Pain Management Not Using Local Anesthetics Country Germany 22,545,000 6,838

  26. Slide 26: Why Haven't Extended Release Local Anesthetics Penetrated This Large Market?

    Why Haven’t Extended Release Local Anesthetics Penetrated This Large Market? • Regardless of delivery technology, extended release bupivacaine products do not reduce pain sufficiently beyond 24 hours to beat bupivacaine HCl: – Exparel® (liposomal ER bupivacaine) 60-Hour Continuous Infusion of – Xara

  27. Slide 27: Inflammation Plays a Key Role in Pain Management

    Inflammation Plays a Key Role in Pain Management (Current local anesthetics do not address this) • Surgical insult produces an BUPH+ BUPN + H+ immediate drop in pH Outside membrane • As inflammatory cytokines are Nerve Cell released and inflammation sets in, Membrane the acidic environment is Inside

  28. Slide 28: HTX-011 Designed to Produce Marked Analgesia Through First 72 Hours

    HTX-011 Designed to Produce Marked Analgesia Through the First 72 Hours After Surgery1 Saline Control Liposomal Bupivacaine 2 Biochronomer ER Bupivacaine Biochronomer ER Meloxicam HTX-011 (Biochronomer Bupivacaine + Meloxicam with 3-day release) Percentage of Maximal Force (60 gm) 100.0 90.0 80.0 In

  29. Slide 29: Activity of HTX-011 Cannot Be Replicated by Systemic Meloxicam

    Activity of HTX-011 Cannot Be Replicated By Systemic Administration of Meloxicam Along With ER Bupivacaine Pig Post-Operative Pain Model Saline Placebo HTX-011 (Bupivacaine + Meloxicam) Biochronomer ER Bupivacaine With Simultaneous Injectable Meloxicam 100.0 90.0 80.0 Increasing Analgesia Percent of

  30. Slide 30: Unique Mechanism of Action of HTX-011 in Pig Model

    The Unique Mechanism of Action of HTX-011 Has Been Demonstrated in the Pig Post-Op Pain Model The normalization of pH starting at 8 hours with HTX-011 allows almost % of un-ionized 10x more bupivacaine (BPV) to enter the nerve to block the pain signal BPV available to 7.50 enter nerve 7.25 HTX-011-5

  31. Slide 31: Unique MOA Produces Greater Pain Reduction Than ER Bupivacaine or Meloxicam

    Unique MOA of HTX-011 Produces Significantly Greater Pain Reduction Than ER Versions of Bupivacaine or Meloxicam 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 vs

  32. Slide 32: HTX-011 Excellent PK-PD Relationship

    Unique MOA of HTX-011 Results in an Excellent PK-PD Relationship Not Seen With Other ER Bupivacaine Formulations HTX-011 (bupivacaine + meloxicam) PK-PD Relationship Mean Pain Intensity vs Time Pain Score Plasma PK 4 50 45 3.5 Bupivacaine Concentation (ng/mL) 40 3 35 (Saline-HTX-011) 2.5 ΔPain Score

  33. Slide 33: Exparel Does Not Demonstrate a PK-PD Relationship

    Exparel® Does Not Demonstrate a PK-PD Relationship Exparel® (liposomal bupivacaine) No PK-PD Relationship Mean Pain Intensity vs Time 3 140 ∆ Pain Score Plasma Conc 120 Plasma Bupivacaine (ng/mL) ∆ Pain Score (Saline minus Exparel) 2.5 100 2 80 1.5 60 1 40 0.5 20 0 0 0 24 48 72 Hours AUC0-24 hr AUC0

  34. Slide 34: Properties of HTX-011 Suited for Needle-Free Administration

    The Properties of HTX-011 Are Ideally Suited for Needle-Free Administration to Coat the Affected Tissue • HTX-011 is a single dose application of a viscous solution administered directly via needle free syringe to coat the affected tissue within the surgical site prior to suturing • HTX-011 releases

  35. Slide 35: HTX-011 Pharmacokinetics Consistent Across Surgical Sites

    Pharmacokinetics of HTX-011 are Remarkably Consistent Across a Wide Selection of Surgical Sites Bupivacaine Concentrations With HTX-011 35

  36. Slide 36: Bupivacaine Solution Pharmacokinetics Much More Variable Than HTX-011

    Pharmacokinetics of Bupivacaine Solution Are Much More Variable Than HTX-011 Bupivacaine Concentrations With Bupivacaine HCl Solution 1000 208 Bunionectomy 202 Herniorrhaphy 900 203 Abdominoplasty 209 TKA 800 700 R² = 0.2633 600 Cmax 500 400 300 200 100 0 0 2000 4000 6000 8000 10000 12000 AUC (0-inf

  37. Slide 37: HTX-011 Phase 2 Results

    HTX-011 PHASE 2 RESULTS 37

  38. Slide 38: Study 202: HTX-011 Reduces Pain After Herniorrhaphy

    Study 202: HTX-011 Reduces Pain Significantly Better Than Placebo or Bupivacaine (Standard-of-Care) After Herniorrhaphy Increasing Pain 38 wWOCF, windowed-worst observation carried-forward for use of opioid rescue medication and LOCF for missing data

  39. Slide 39: Study 208: HTX-011 Reduces Pain After Bunionectomy

    Study 208: HTX-011 Reduces Pain Significantly Better Than Placebo or Bupivacaine (Standard-of-Care) After Bunionectomy Increasing Pain 39 wWOCF, windowed-worst observation carried-forward for use of opioid rescue medication and LOCF for missing data

  40. Slide 40: Cross-Study Comparison in Standardized Bunionectomy Model

    In a Cross-Study Comparison of a Standardized Bunionectomy Model Two Forms of Extended-Release Bupivacaine Produced Remarkably Similar Results Liposomal ER Bupivacaine 120 mg* HTX-002 ER Bupivacaine 60 mg HTX-011 (60 mg) 10 Greater Pain Reduction vs Placebo 0 -21.0 -22.4 -53.1 -20.0 -27.5 -84.7 -19.

  41. Slide 41: HTX-011 Reduces Total Opioid Use in Phase 2

    HTX-011 Reduces Total Opioid Use vs Bupivacaine and Placebo in Phase 2 Study 202 - Herniorrhaphy Study Study 208 - Bunionectomy Study Source: Data on File, Heron Therapeutics, Inc. 41

  42. Slide 42: HTX-011 Increases Proportion of Opioid-Free Subjects

    HTX-011 Increases Proportion of Opioid-Free Subjects vs Bupivacaine and Placebo in Phase 2 Study 202 - Herniorrhaphy Study Study 208 - Bunionectomy Study Source: Data on File, Heron Therapeutics, Inc. . 42

  43. Slide 43: Serum Bupivacaine Concentrations Well Below LAST Levels

    Serum Bupivacaine Concentrations After HTX-011 Are Well Below the Levels Associated With LAST* *Local Anesthetic Systemic Toxicity (LAST) Scott DB. Br J Anaesth 1975;47:56-61 Knudsen K, et al. Br J Anaesth 1997;78:507-514 From Eugene Viscusi, et al. ESRA 2017 43

  44. Slide 44: Phase 2 Adverse Events Potentially Associated With LAST

    HTX-011 Phase 2 Adverse Events Potentially Associated With LAST* Similar to Placebo and Less Than Bupivacaine HCl Saline Placebo Bupivacaine HCl HTX-011 (N=302) (N=74) (N=430) n (%) n (%) n (%) Any LAST-related TEAE 35 (11.6) 12 (16.2) 50 (11.6) Dizziness 21 (7.0) 8 (10.8) 26 (6.0) Hypotension 11 (3

  45. Slide 45: Enrollment Completed in Both Phase 3 Pivotal Trials

    ENROLLMENT COMPLETED IN BOTH PHASE 3 PIVOTAL TRIALS 45

  46. Slide 46: Study 301: Phase 3 Bunionectomy Study Design

    Study 301: Phase 3 Bunionectomy Study Design Study 301 HTX-011 60 mg Endpoints Instillation Randomization (3:3:2) Primary: Pain Intensity AUC0-72 vs. placebo N = 150 1st Key Secondary: Pain Intensity AUC0-72 vs. bupivacaine Bupivacaine 50 mg 2nd Key Secondary: Opioid use vs. placebo Injection N = 15

  47. Slide 47: Study 302: Phase 3 Herniorrhaphy Study Design

    Study 302: Phase 3 Herniorrhaphy Study Design Study 302 HTX-011 300 mg Endpoints Instillation Randomization (2:2:1) Primary: Pain Intensity AUC0-72 vs. placebo N = 160 1st Key Secondary: Pain Intensity AUC0-72 vs. bupivacaine Bupivacaine 75 mg 2nd Key Secondary: Opioid use vs. placebo Injection 3rd

  48. Slide 48: On-Going Phase 2b Studies

    [T1E=IROWN THERAPEUTICS Developing Best-in-Class Medicine. Improving Lives.” On-Going Phase 2b Studies

  49. Slide 49: Phase 2b Study 211: Nerve Block in Breast Augmentation

    Phase 2b Study 211: Nerve Block in Breast Augmentation Study Design HTX-011 60 mg HTX-011 120 mg HTX-011 240 mg HTX-011 400 mg Nerve Block Nerve Block Nerve Block Nerve Block N = 12 N = 24 N = 24 N = 48 HTX-011 400 mg Instillation N = 48 Cohort 1 Cohort 2 Cohort 3 Cohort 4 Saline Placebo Saline Plac

  50. Slide 50: Phase 2b Total Knee Arthroplasty Study Design

    Phase 2b Total Knee Arthroplasty Study Design HTX-011 200 mg HTX-011 400 mg Instillation Instillation N = 20 N = 50 HTX-011 200 mg HTX-011 400 mg Instillation + Injection Instillation + Ropi Injection Cohort 2 N = 50 Cohort 1 N = 20 IRC Saline Placebo Saline Placebo Injection Injection N = 10 N = 50

  51. Slide 51: Summary: HTX-011 Is Poised to Fulfill the Promise of Long-Acting Local Anesthetic

    Summary: HTX-011 Is Poised to Fulfill the Promise of a Long-Acting Extended-Release Local Anesthetic Large, growing market opportunity  Differentiated, synergistic mechanism addresses inflammation  Demonstrated superiority vs. generic bupivacaine (BPV) solution in 3 diverse surgical models in Phas

  52. Slide 52: Positive Response to HTX-011's Target Product Profile

    Overwhelmingly Positive Response by Physicians and Pharmacists to HTX-011’s Target Product Profile HTX-011 Target Product Profile: Strengths Reduction in Opioid Consumption 88% 11% Reduction in Pain Score 87% 13% Reduction in Opioid AEs* 80% 19% Analgesia Duration 79% 20% Mechanism of Action 73% 23%

  53. Slide 53: Pharmacy Directors Strongly Preferred HTX-011 over Exparel

    Pharmacy Directors Strongly Preferred HTX-011 over Exparel® Based on MOA, Reduction in Pain, and Reduction in Opioids Preference for HTX-011 vs. Exparel Based on Product Attributes Physician Responses Pharmacy Director Responses 32% 41% 23% 3% 1% Mechanism of Action 37% 29% 27% 7% 21% 43% 31% 6% 0%

  54. Slide 54: Financial Summary

    Financial Summary Cash, cash equivalents, short-term investments, accounts receivable plus cash from projected net sales of SUSTOL and CINVANTI are expected to be sufficient to fund operations for at least one year. Summary Statement of Operations and Net Cash Used in Three Months Ended Twelve Month

  55. Slide 55: Key Catalysts in Pain Management & CINV Franchises

    Key Catalysts in Pain Management & CINV Franchises HTX-011 for Postoperative Pain CINVANTI™ and SUSTOL® for CINV 2018 net sales guidance for CINV  Fast Track designation granted franchise: $60M - $70M  Completed enrollment in Phase 3 pivotal trials Top-line Pivotal Phase 3 results 1H 2018 NDA fili

Heron Therapeutics — Investor Presentation (March 2018) on 6ix