Heron Therapeutics, Inc. (NASDAQ:HRTX) Q2 2023 Earnings Call Transcript

And so, we’ve been looking at a number of different surgical companies that would be distributors, if you will, and that we could partner with who are pretty much living in those surgical suites on a daily basis. I know some of our competitors have done that. And we think by picking a partner in the surgical suite, it would allow our reps to want to spend more time with physician detailing the product, but also frees them up a bit to do other things with APONVIE and CINVANTI. And [our true] (ph) thing would be — give a lift on those products as well. So, I think you’ll see over the next fairly short timeframe, we will pick a partner of some sort that will add to our footprint with ZYNRELEF that I think it should be [indiscernible] side of the product.

And again, these are things that we have not forecasted in.

Carl Byrnes: Got it. Thanks. And then kind of switching gears a little bit. If we look at SG&A, which is around — I think, around $36.4 million and R&D at $17.6 million, can you quantify how much in the quarter was related to severance and potentially kind of one-time extraordinary-type charges? And what you expect the expense levels to be, if you’re able to quantify for the third quarter? Or if that’s not possible? Or do you expect additional one-time severance and one-time type charges to hit the third quarter? Thanks.

Ira Duarte: Yes. I think we publicly released, we have about $5.9 million in one-time charge that will come through to the end of this year. So, go in 2024, you will see our operating expenses — they’ve been [advanced, levelling] (ph) up at $120 million for the year, $120 million in 2024, and we believe we cut probably another $10 million of that going forward.

Carl Byrnes: Got it. Thanks.

Operator: [Operator Instructions] Your next question comes from the line of Kelly Shi from Jefferies. Please go ahead. Your line is open.

Unidentified Analyst: Hi. This is [Clara] (ph) on for Kelly. Thanks for taking my question. So, I have two questions. For APONVIE, so this is the first full quarter of sales. Seems like you had a lot of positive feedback from physicians. So, just wondering how should we think about the sales growth trajectory from now on for APONVIE.

Craig Collard: Yes. No, it’s a great question. We haven’t had a ton of time with APONVIE, but the biggest difference with APONVIE versus ZYNRELEF is that when we get an IDN or a formulary win with ZYNRELEF, it’s still going to take quite a bit of work with individual surgeons and that type of thing. It’s not necessarily a system-wide conversion. The difference with APONVIE is that there are situations where we can get system-wide conversion. And what I mean by that, if you take a hospital system, say like Baylor, and we were to selectively get moderate-to-severe patients, we can literally get all of those patients, so all high-risk patients, maybe in the situation they convert to APONVIE and the EBIC system and so forth. So, we get a system win that leads to sort of a conversion, if you will.

And so I think what you’ll find over the next few quarters is that we’ll begin to get the system-wide orders that create bigger revenues, almost annuities, if you will, in certain accounts going forward. We’ve had a couple of hospital systems to date that have converted. You haven’t really seen that in the results yet, but you’ll begin to see it. And I think we have another 23 systems right now that are in review. So again, we really like the progress. I think it’s going to take a little more time, obviously, to see the results from that. But again, in a very short time period, I think you’re going to begin to see some of these more, if you will, bigger orders that come through. And ideally, what we want to do as we report going forward, we’ll try to give a little more insight in the pipeline, hospital wins and that type of thing, that way, we’ll have a bit more transparency in what’s really going on with the product.