Heron Therapeutics Riles Investors with Lackluster Q3 Performance
Heron Therapeutics Inc’s Q3 performance proved to be a bitter pill for investors, with sales missing the consensus and an EPS loss that couldn’t shake off the disappointment. The company’s drastic cost-cutting plan was billed as a potent remedy, designed to slash operating expenses by a hefty 26% in 2023 compared to the previous year, with a further reduction expected for 2024. However, the meager sales forecast for both fiscal years left bitter aftertaste in the mouths of many.
Despite the company’s attempts to paint a rosy future with improved sales projections for FY23 and FY24, Needham was quick to scrutinize their plan, casting doubt on the potential execution and sales improvements needed to reach profitability. Their Buy rating seemed like sugarcoating a bitter pill, especially when the stock price was already on a sour note, trading around $0.87, up a whopping 61.40%.
The company has been banking on the success of its Chemotherapy Induced Nausea and Vomiting franchise and the expansion of Zynrelef. However, with Zynrelef’s label expansion not expected until early 2024 and a vial access needle modification not until September 2024, investors are left wondering if these are just empty promises.
Heron Therapeutics’ attempt to spin their Q3 results as a step in the right direction did little to soothe anxious investors. The company’s future profitability seems like a distant dream, one that may require more than just a few quarters of execution.