- Expected overall cash savings of
$75 million through 2025
-
New executive management team in place
SAN
DIEGO, July 24, 2023 /PRNewswire/ -- Heron
Therapeutics, Inc. (Nasdaq: HRTX), a commercial-stage biotechnology
company focused on improving the lives of patients by developing
and commercializing therapeutic innovations that improve medical
care, today announced a cost reduction plan and a corporate
restructuring, following a strategic review of the business
conducted by the new management team. These actions are expected to
result in cash savings of approximately $75
million through 2025, inclusive of $45 million in operational savings, and continue
Heron's progression towards a streamlined organization focused on
commercial execution, enabling it to take a crucial step towards
achieving profitability.
"The cost reduction plan and restructuring are the result of a
recent internal review of Heron's operations, business practices
and strategies by our new management team. With the new
management team in place our goal is to develop a long-term plan
that maximizes the potential of Heron, and we believe we have taken
the first initial step in achieving that goal with the plan we
announced today," said Craig
Collard, Chief Executive Officer of Heron. "While making
some of these decisions was difficult, I believe they are necessary
to better position Heron for a sustainable future. Going forward,
we are focused on enhancing the value of our products while running
an efficient business that delivers value to our
shareholders."
"In conjunction with our concurrent $30
million equity financing, these operational changes
represent a critical realignment of the Company's resources to
enable Heron to maximize our commercial capabilities and unlock the
significant value of our assets," added Adam Morgan, Chairman of Heron's Board of
Directors. "Based on our current operational plan, we believe
this financing will be the last equity raise needed prior to
achieving cash flow positivity."
The Company's cost reduction plan will focus on streamlining
operational expenditures, including reductions in research and
development and general and administrative expenses, while aiming
to achieve profitability in late 2024. A portion of the
expected cash savings will come from reduced external spend,
including completed renegotiation and right-sizing of key vendor
contracts, which is expected to result in over $31 million in cash savings through 2025. In
addition, Heron has conducted a corporate restructuring, reducing
the Company's employee base by 25%. Due to this
restructuring, Heron expects to incur non-recurring cash expenses
of approximately $5.9 million in
2023.
"While this represents a significant step in realigning Heron's
corporate infrastructure, the Company remains committed to
continually optimizing operational expenses going forward," Mr.
Collard continued. "The emphasis on efficient operations,
combined with a focus on product optimization and innovative
commercial strategies that leverage the growth potential of the
oncology and acute care portfolios, will position us well to
optimize the Company's future performance. We look forward to
sharing more details on our strategic plan during the second
quarter earnings call."
About Heron Therapeutics, Inc.
Heron Therapeutics, Inc. is a commercial-stage
biotechnology company focused on improving the lives of patients by
developing best-in-class treatments to address some of the most
important unmet patient needs. Our advanced science, patented
technologies, and innovative approach to drug discovery and
development have allowed us to create and commercialize a portfolio
of products that aim to advance the standard-of-care for acute care
and oncology patients. For more information,
visit www.herontx.com.
Forward-looking Statements
This news release contains "forward-looking statements" as
defined by the Private Securities Litigation Reform Act of 1995,
including statements regarding the expected savings, positioning of
the Company and potential, timing of achieving profitability of the
Company as a result of the cost reduction plan and restructuring,
and expectations regarding the need for future equity financings.
Heron cautions readers that forward-looking statements are based on
management's expectations and assumptions as of the date of this
news release and are subject to certain risks and uncertainties
that could cause actual results to differ materially, including,
but not limited to, failure to realize the expected benefits from
the cost reduction plan and restructuring; any inability or delay
in achieving profitability, the expected future balances of Heron's
cash, cash equivalents and short-term investments; the expected
duration over which Heron's cash, cash equivalents and short-term
investments balances will fund its operations and the risk that
future equity financings may be needed; and other risks and
uncertainties identified in the Company's filings with the U.S.
Securities and Exchange Commission. Forward-looking statements
reflect our analysis only on their stated date, and Heron takes no
obligation to update or revise these statements except as may be
required by law.
Investor Relations and Media Contact:
Ira Duarte
Executive Vice President, Chief Financial Officer
Heron Therapeutics, Inc.
iduarte@herontx.com
858-251-4400
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SOURCE Heron Therapeutics, Inc.