Heron Therapeutics (HRTX -28.53%), a biopharmaceutical company focused on acute care and oncology drugs, released its second quarter 2025 results on August 8, 2025. The standout news was a 55.5% jump in Acute Care segment revenue, offset by another GAAP revenue shortfall versus analyst expectations and continued weakness in the Oncology segment. Net revenue (GAAP) was $37.2 million, trailing the $38.075 million consensus and showing year-over-year growth of 3.3%. GAAP loss per share was $(0.02) versus an expectation of $(0.01), while operating losses narrowed and adjusted EBITDA (non-GAAP) turned positive year-over-year. The quarter showed progress, particularly in acute care, but ongoing Oncology declines and the GAAP revenue miss left a mixed overall impression.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $(0.02) | $(0.01) | $(0.06) | 66 % |
| Revenue (GAAP) | $37.2 million | N/A | $36.0 million | 3.3 % |
| Adjusted EBITDA | $1.8 million | $(1.2) million | N/A | |
| Revenue – Acute Care | $10.7 million | $6.9 million | 55.5 % | |
| Revenue – Oncology | $26.5 million | N/A | N/A |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Success Factors
Heron Therapeutics specializes in the development and commercialization of therapeutics for patients in acute care and oncology settings. Its portfolio includes pain management and anti-nausea drugs aimed at the hospital and outpatient care markets.
Recent attention has focused on building the Acute Care business, driven by ZYNRELEF, an extended-release local anesthetic, and APONVIE, an intravenous anti-nausea drug for postoperative care. Key factors for future growth are innovation, regulatory approvals, intellectual property protection, commercial execution, and effective management of manufacturing and supply chain relationships.
Quarterly Developments: Segment Review and Key Actions
The Acute Care segment was a bright spot, driven by notable GAAP net revenue growth in both ZYNRELEF and APONVIE. Acute Care revenue jumped 55.5% year-over-year, supported by strategic investments in commercial teams and new sales initiatives. ZYNRELEF, a long-acting anesthetic product, produced 40.4% year-over-year growth in GAAP net revenue, with unit demand up 6.3% compared to Q1 2025. Management attributed some softness in revenue to a temporary wholesaler adjustment related to the 400mg VAN (Vial Access Needle) transition, a recent packaging and workflow optimization. Commercial momentum for ZYNRELEF is expected to accelerate with a new sales team dedicated to the brand beginning in Q3 2025, along with a permanent Centers for Medicare & Medicaid Services (CMS) J-code that will ease hospital reimbursement from October 2025 onward.
APONVIE, targeted for prevention of postoperative nausea and vomiting, saw revenue grow 141.6% year-over-year, and unit demand rose 19% sequentially. This reflects expanding hospital system adoption. APONVIE also will benefit from a dedicated field sales force in the next quarter, prioritizing deeper account access and broader utilization across moderate and high-risk surgery patients.
The Oncology segment declined 9.0% (GAAP) due to ongoing weakness in SUSTOL, another anti-nausea/anti-vomiting product. CINVANTI, an intravenous version in the same category, fell 3.1%, while SUSTOL decreased by 43.4% (GAAP). No significant new product drivers or catalysts were announced for the segment this quarter.
Beyond sales, Heron reported a gross margin of 73.5% of revenue. Operating expenses (GAAP) fell by $3.0 million year-over-year, reaching $29.0 million compared to Q2 2024. Adjusted EBITDA (non-GAAP) was positive at $1.8 million, compared to a negative result last year, indicating better operational leverage. The company also reduced total debt to $145 million (from $175 million), extending maturities to at least 2030. This restructuring was aimed at providing greater flexibility for growth. Cash and short-term investments stood at $40.6 million, down nearly $10 million from the prior quarter. Inventory build is notable, with stocks rising by almost $20 million in six months (GAAP, from $53.2 million at December 31, 2024, to $73.0 million at June 30, 2025).
Product Portfolio
ZYNRELEF leads the Acute Care segment as an extended-release anesthetic, recently enhanced with the VAN kit for easier hospital use. APONVIE is an intravenous anti-nausea product targeting postoperative care. CINVANTI and SUSTOL are anti-nausea therapies used mainly for patients undergoing chemotherapy in Oncology, with CINVANTI administered intravenously and SUSTOL administered via injection. Growth in Acute Care products helped offset declines in Oncology, though Heron’s future depends on translating current sales momentum into sustained, profitable adoption across hospital channels.
Looking Ahead: Guidance and Investor Considerations
Heron reaffirmed its full-year 2025 net revenue (GAAP) target of $153.0 million to $163.0 million, implying that revenue must reach at least $77 million in the second half of 2025 to hit the low end. The outlook for adjusted EBITDA (non-GAAP) was raised to $9.0 million to $13.0 million for full-year 2025, up from the prior range of $4.0 million to $12.0 million, reflecting year-to-date operating performance and tighter cost management. Management’s expectations for a step-change in Acute Care revenue in the second half of 2025 are closely tied to commercial team expansion and the rollout of permanent reimbursement codes for ZYNRELEF.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
