Heron Therapeutics Rises on Strong Q1 Performance and Strategic Milestones

Heron Therapeutics (NASDAQ: HERN) delivered a robust first quarter of 2025, reporting record financial results and advancing key strategic initiatives that position the company as a leader in non-opioid pain management and oncology supportive care. With net revenue up 12.2% year-over-year and Adjusted EBITDA turning positive for the first time in over a decade, Heron’s progress underscores its transition from a volatile biotech firm to a financially resilient, growth-oriented enterprise.

Financial Highlights: Growth Anchored in Acute Care

Heron’s Q1 2025 net revenue reached $38.9 million, driven primarily by its Acute Care franchise, which surged 89.4% year-over-year. The standout performer was ZYNRELEF, the company’s flagship product, which generated $8.0 million in revenue—a 60.4% increase from Q1 2024. This growth reflects strong demand for the non-opioid local anesthetic, which reduces postoperative opioid use and has expanded its FDA-approved indications to include surgeries such as foot/ankle procedures and small-to-medium abdominal operations.

The Oncology segment, however, faced headwinds, with revenue declining 2.2% to $28.6 million. While CINVANTI (for chemotherapy-induced nausea) remained stable at $25.7 million, SUSTOL saw a 20.9% drop to $2.9 million, likely due to competitive pressures from newer therapies.

Heron’s Adjusted EBITDA improved dramatically, hitting $6.2 million—a stark contrast to the $0.7 million loss in Q1 2024. This turnaround, fueled by operational efficiencies and ZYNRELEF’s momentum, prompted the company to raise its full-year 2025 Adjusted EBITDA guidance to $4.0–$12.0 million, up from the original $0.0–$8.0 million range.

Strategic Wins: Legal Resolution and Regulatory Tailwinds

The quarter’s most significant corporate update was the settlement with Mylan Pharmaceuticals, resolving patent litigations over CINVANTI and APONVIE. Under the terms, Mylan gains a license to market generic versions of these drugs in the U.S. starting June 1, 2032, with early entry possible under customary terms. This removes a major overhang for Heron, which had faced the risk of generic competition as early as 2028.

Equally impactful was the Non-Opioid Policy for Pain Relief (NOPAIN Act), effective April 1, 2025. This CMS policy mandates separate Medicare/Medicaid reimbursement for non-opioid pain treatments like ZYNRELEF, addressing a critical barrier to adoption. The policy’s rollout has already boosted provider awareness, and Heron expects it to accelerate ZYNRELEF’s market penetration.

Operational Momentum: Product Transitions and Partnerships

Heron is also advancing ZYNRELEF’s product lifecycle to maintain its competitive edge. The transition from the Vented Vial Spike (VVS) to the Vial Access Needle (VAN)—a simpler, safer preparation method—is proceeding smoothly, with VVS inventory efficiently cleared. Looking ahead, a ready-to-use Prefilled Syringe (PFS) is under development, targeting an early 2027 launch. These innovations aim to further streamline ZYNRELEF’s use in surgical settings.

The company’s partnership with Crosslink Network, LLC adds another growth lever. This co-promotion agreement, launched in 2024, is now yielding results, with sales representatives focused on expanding ZYNRELEF’s adoption among surgeons and acute-care providers.

Risks and Challenges

Despite the positive trajectory, risks remain. The SUSTOL decline signals potential vulnerabilities in Heron’s oncology portfolio, particularly as newer therapies enter the market. Additionally, while the Mylan settlement delayed generic competition, it is not eliminated—Heron must ensure ZYNRELEF’s dominance lasts until 2032 and beyond.

The company’s cash position—$50.7 million as of March 31, 2025—provides a stable base but may require supplementation if R&D or commercialization costs escalate. Heron’s stockholders’ deficit ($28.5 million) also warrants monitoring.

Conclusion: A Strong Foundation for Sustained Growth

Heron Therapeutics has emerged from Q1 2025 as a financially healthier, strategically agile company. With ZYNRELEF’s strong performance, the NOPAIN Act’s reimbursement tailwind, and a pipeline of product innovations, the company is well-positioned to capitalize on the growing demand for non-opioid pain solutions.

Key data points affirm this outlook:
- ZYNRELEF’s revenue growth (60.4%) and Acute Care segment expansion (89.4%) highlight its market leadership.
- The NOPAIN Act’s April 2025 implementation aligns with ZYNRELEF’s FDA-approved indications for over 20 surgical procedures, creating a virtuous cycle of adoption and reimbursement.
- The $6.2 million Adjusted EBITDA and raised guidance signal improved financial discipline, reducing reliance on dilutive financing.

While challenges such as SUSTOL’s decline and eventual generic competition loom, Heron’s focus on ZYNRELEF’s growth and operational excellence suggests it can navigate these risks. For investors, Heron’s Q1 results and strategic progress make it a compelling play on the shift away from opioids in postoperative pain management—a trend that is both clinically necessary and financially rewarding.

Heron’s journey from volatility to stability exemplifies the power of a focused, data-driven strategy. As ZYNRELEF’s profile continues to rise and the NOPAIN Act’s impact deepens, the company is poised to deliver sustained value for shareholders in 2025 and beyond.