Heron Therapeutics(HRTX) - 2024 Q4 - Annual Report

Revenue and Sales Performance - The company reported net product sales from ZYNRELEF, APONVIE, CINVANTI, and SUSTOL, with revenues dependent on various factors including market conditions and customer agreements [306]. - Net product sales for 2024 reached $144.3 million, a 13.6$127.0 million in 2023 [331]. - Acute care net product sales grew by 57.3% in 2024, driven by increased market share and the commercial launch of APONVIE in March 2023 [331]. - Total acute care net product sales increased by 87.5% in 2023 compared to 2022, indicating strong growth momentum [332]. Expenses and Cost Management - Research and development expenses primarily consist of salaries, stock-based compensation, and costs related to clinical and preclinical development, with all costs expensed in the period incurred [308]. - General and administrative expenses include salaries and related costs for various personnel functions, as well as professional fees for legal and corporate purposes [309]. - Sales and marketing expenses are focused on personnel costs and commercialization efforts related to the company's products [310]. - Research and development expenses decreased by 57.4% in 2024 to $16.7 million, primarily due to restructuring and reduced headcount [337]. - Operating expenses as a percentage of sales decreased across all categories in 2024, with sales and marketing expenses down 30.4$59.3 million as of December 31, 2024, sufficient to meet anticipated cash requirements for at least one year [345]. - The company has $175.5 million in current indebtedness that will need to be refinanced to fully fund its business plan [345]. - The company invests in marketable securities to preserve capital, maintain liquidity, and maximize yields, with a focus on high credit quality financial institutions [357]. - The investment portfolio includes only marketable securities and instruments with active secondary markets to ensure liquidity [357]. - The company does not expect material impact on operating results from sudden interest rate changes, as it can hold fixed-income investments to maturity [357]. Risks and Economic Factors - The company faces significant risks from global business, political, and macroeconomic conditions, including financial market volatility and potential government shutdowns [304]. - Foreign currency exposure is primarily to fluctuations in the Euro, but the company does not anticipate significant transaction gains or losses at current operational levels [358]. - The company has not engaged in foreign currency hedging to date, and any gains or losses are included in the Consolidated Statements of Operations [358]. - Inflation has not materially impacted the company's business or results of operations during the reporting periods [359]. - Significant adverse changes in inflation could negatively impact future results of operations [359]. Profitability and Loss - The company reported a net loss of$13.6 million in 2024, a significant reduction from a net loss of $110.6 million in 2023 [346]. - Gross profit for 2024 was$105.6 million, significantly up from $61.9 million in 2023, reflecting improved cost management [330]. Revenue Recognition and Inventory Management - Revenue recognition follows the Financial Accounting Standards Board guidelines, ensuring that revenue reflects the transfer of goods or services to customers [316]. - The company monitors inventory levels and may write down obsolete inventory or inventory exceeding expected sales requirements [323]. - Stock-based compensation is estimated using the Black-Scholes model, with assumptions that could impact net loss and net loss per share if changed [327]. Agreements and Collaborations - A five-year co-promotion agreement was established with Crosslink Network to enhance the promotion of ZYNRELEF for orthopedic indications, with compensation based on growth over a predetermined baseline [305].