What happened

Heron Therapeutics (NASDAQ:HRTX), a commercial-stage biotech developing medicines to address unmet medical needs, saw its shares end Monday higher by a healthy 26.9%. The catalyst?

Heron's stock bolted northward in response to two late-stage readouts for its non-opioid pain medication, HTX-011, in patients undergoing bunionectomy (a type of bunion surgery) and hernia repair, respectively.

Chalkboard with the word "Pain" written on it, and an eraser.

Image Source: Getty Images.

Digging into the details, HTX-011 reportedly generated statistically significant reductions in both pain intensity and opioid use through a 72-hour period following surgery, compared to patients receiving either a placebo or bupivacaine solution.

So what

If approved, Heron's experimental pain medication is expected to compete directly against Pacira Pharmaceuticals' (NASDAQ:PCRX) FDA-approved Exparel, a liposomal formulation of bupivacaine. Last year, Pacira's drug hauled in a noteworthy $280 million in sales.  

Now what

Heron is on track to file a New Drug Application for HTX-011 in the second half of this year. While HTX-011's commercial opportunity as a competitor to Exparel is substantial, the drug's ability to reduce opioid use in the postoperative setting could open up a far larger market.

If the FDA grants HTX-011 a broad label in the postoperative setting, for instance, the drug should be able to easily surpass Exparel's commercial trajectory and perhaps even go on to become a blockbuster-level product (sales in excess of $1 billion per year).

Having said that, Heron is still in the process of learning how to effectively market drugs, so an approval doesn't necessarily mean that HTX-011 will get off to a roaring start. In fact, the company would probably be better off putting itself up for sale in the event HTX-011 does get a green light from the FDA early next year. 

 

 

George Budwell has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.