EX-99.1 2 d835210dex991.htm EX-99.1

Company Update December 2014 Exhibit 99.1

2 Legal Disclaimer This presentation contains "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties, including uncertainties associated with the development, regulatory approval, manufacture, launch and acceptance of new products, completion of clinical studies and the results thereof, the ability to establish strategic alliances, progress in research and development programs and other risks and uncertainties identified in the Company's filings with the Securities and Exchange Commission. Actual results may differ materially from the results expected in our forward looking statements. We caution investors that forward- looking statements reflect our analysis only on their stated date. We do not intend to update them except as required by law.

3 Status of Development Programs Preclinical Phase 1 Phase 2 Phase 3 NDA Intravenous NK 1 for CINV CINV: Acute and Delayed after MEC, and Acute HEC SUSTOL (APF530) SUSTOL (APF530) HTX-019 HTX-011 Delayed HEC Will be evaluated in soft tissue, nerve block, and orthopedic indications Pain Program HTX-003 30-Day Buprenorphine for chronic pain and addiction

CINV FRANCHISE

5 CINV Highlights • SUSTOL® (granisetron injection, extended release), is a long-acting, injectable product for the prevention of chemotherapy-induced nausea and vomiting (CINV) – 1,341-patient, randomized, controlled, Phase 3 study demonstrated activity in acute and delayed onset CINV after moderately emetogenic chemotherapy, and acute onset CINV after highly emetogenic chemotherapy (HEC) – On-going 1000 patient study in patients receiving HEC is designed to obtain a “delayed HEC” indication; no injectable 5-HT 3 agent is currently approved for delayed HEC • HTX-019 is a proprietary intravenous (IV) formulation of aprepitant, an NK 1 receptor antagonist and is distinguished from the only IV NK 1 receptor antagonist presently approved in the U.S. in that it does not contain polysorbate 80, which may cause hypersensitivity reactions in some patients – Rapid development utilizing the 505(b)(2) registration pathway is anticipated to achieve NDA submission in 1H2016

6 5-Day Profile: APF530 Pharmacokinetics Granisetron is released rapidly following injection of APF530 and continues to be released for 5-days, providing long-acting coverage for CINV Minimum therapeutic concentration of granisetron* *Data from patent application 20120258164 for transdermal granisetron All subjects (n= 18) mean ± SEM 0 24 48 72 96 120 144 168 Time after Dosing (h) 0 5 10 15 20

7 SUSTOL Pivotal Phase 3 Study Overview • Randomized, controlled, multi-center study • 1,341 patients in primary efficacy population • Two doses of APF530 (5 mg and 10 mg granisetron) compared to the approved dose of Aloxi® (results from 10 mg dose group presented) • Patients stratified by type of chemotherapy regimen: moderately emetogenic (MEC) or highly emetogenic (HEC) • Primary end point compared complete response between groups in both the acute (day 1) and delayed (days 2-5) phase – Complete response defined as no emesis and no rescue medications – ±15% margin used to establish non-inferiority

8 Primary Efficacy Results: Complete Response Patients Receiving Moderately Emetogenic Chemotherapy Acute Delayed APF530 10mg Acute Delayed Difference in Complete Response APF530-Aloxi (97.5% CI) -15 -10 -5 0 5 10 15 75.0 76.9 57.2 58.5 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0

9 Primary Efficacy Results: Complete Response Patients Receiving Highly Emetogenic Chemotherapy Difference in Complete Response APF530-Aloxi (98.33% CI) -15 -10 -5 0 5 10 15 Acute Delayed APF530 10mg Acute Delayed 80.7 81.3 64.3 67.1 0 10 20 30 40 50 60 70 80 90 100

10 Safety Summary 1 Safety results with the 5 mg dose of APF530 studied in separate arm of the phase 3 study are not included 2 >90% of injection site reactions were reported as mild; one patient discontinued due to injection site reaction Cycle 1 Safety Results APF530 10 mg 1 Aloxi 0.25 mg N % N % Drug Related Serious Adverse Events 0 0 Discontinued Due to Adverse Event 1 0.2 0 0 Frequent Adverse Events Gastrointestinal Disorders Constipation Diarrhea Abdominal pain 72 44 13 15.4 9.4 2.8 62 39 28 13.4 8.4 6.0 Nervous System Headache 47 10.0 45 9.7 Injection Site 2 Placebo (NaCl) Bruising Erythema (redness) Nodule (lump) Pain 93 51 50 33 19.9 10.9 10.7 7.1 41 14 3 5 8.9 3.0 0.6 1.1 0 0

11 FDA-Requested ASCO 2011 Reanalysis Improves Difference Between SUSTOL and Aloxi in HEC Patients Protocol Specified HEC Population ASCO 2011 Guideline HEC Population Acute Delayed Acute Delayed 81 81 64 67 0 10 20 30 40 50 60 70 80 90 100 67 75 51 56 0 10 20 30 40 50 60 70 80 90 100

12 CR Rates by Treatment Chemotherapeutic Regimen APF530 10 mg Aloxi 0.25 mg Moderately Emetogenic Acute Cyclophosphamide/Doxorubicin 70.7% 65.7% All other regimens 84.4% 85.0% Delayed Cyclophosphamide/Doxorubicin 47.4% 46.3% All other regimens 72.9% 70.0% Highly Emetogenic Acute Cisplatin regimens 81.1% 75.5% Carboplatin/Paclitaxel 85.4% 89.8% All other regimens 75.4% 67.6% Delayed Cisplatin regimens 66.0% 60.4% Carboplatin/Paclitaxel 70.8% 71.4% All other regimens 65.2% 57.4% Largest Differences Between Arms is Seen With Most Difficult Chemo Regimens 1 • 1 Data from post-hoc analysis. Not statistically significant. • Highlighted HEC regimens were considered HEC in both protocol specified Hesketh and 2011 ASCO Guidelines

13 Response Rates With Chemotherapy Classified as HEC by Both Hesketh and 2011 ASCO* *Cisplatin, carmustine, dacarbazine, dactinomycin, mechlorethamine, streptozotocin SUSTOL reflects 9-11% greater response rate in the most emetogenic chemotherapy 69% 55% 78% 66% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Acute Delayed Aloxi SUSTOL

14 A Delayed-HEC Indication Would Provide Clear Differentiation in an Important Segment of the CINV Market 1 IntrinsiQ data from July 2012 – June 2013 HEC regimens account for ~20% (500K) of palonosetron administrations This is the same segment of the CINV market where NK 1 receptor antagonists are extensively used HEC MEC LEC Minimal Distribution of Aloxi Sales*

15 Phase 3 “MAGIC” Study 1000 patients scheduled to receive HEC* randomized 1:1 Ondansetron 0.15 mg/kg IV (up to 16 mg IV) d 1 + fosaprepitant 150 mg IV d 1 + DEX + placebo SC d1 APF530 500 mg SC d 1 + fosaprepitant 150 mg IV d 1 + DEX + placebo IV d 1 Cycle 1 1. All subjects will receive dexamethasone 12 mg IV on day 1 and 8 mg PO BID on days 2-4 2. All subjects will be allowed to receive “rescue” medications as required at the discretion of their treating physician *HEC agents as defined in the 2011 ASCO CINV guidelines. Superiority design assuming a CR rate of 65% in the control (ondansetron) arm, a binary endpoint (CR or no CR), a 2-sided alpha = 0.05 to test 65% vs 75%; for 90% power you need 880 evaluable patients

16 New SUSTOL Study Strategically Designed Based on Previous Results ^^Average Complete Response rate improvement when adding an NK-1 RA to a 5-HT3 RA and Dex is ~15 - 20% in the delayed HEC *Poll-Bigelli; Cancer, 97:12, 3090, 2003 **Projection of what would happen with a 20% increased response by addition of fosaprepitant to Sustol + Dex Projected Response with addition of NK1 ^^ Study powered to show 10% difference: 65% vs 75% APF530 + Dex + Fosaprepitant** APF530+Dex Ondansetron + Dex + Fosaprepitant* Ondansetron + Dex* 75% Standard of Care Phase 3 Study HEC Study 67% 65% 45% Study powered for a 10% difference between arms 20% difference is expected with the addition of fosaprepitant, 87% 0 10 20 30 40 50 60 70 80 90 100

17 HEC Study Update • >150 site locations have drug • Expect to complete enrollment in 1Q2015, with an NDA resubmission shortly thereafter • FDA has previously indicated that a positive outcome from this study would be sufficient to obtain “delayed-HEC” indication

18 SUSTOL Has the Potential to be the Next Generation 5-HT 3 Receptor Antagonist 5-HT 3 RAs 1 st generation 2 nd generation 3 rd generation Products ondansetron granisetron palonosetron SUSTOL Duration of action Short acting ~ 8 hr half-life Longer acting ~40 hr half-life Long acting PK profile 5-7 days Indications Prevention of CINV in emetogenic chemo including high-dose cisplatin MEC – acute & delayed CINV HEC – acute CINV MEC – acute & delayed CINV HEC – acute & delayed CINV* *Obtaining delayed HEC dependent on results of ongoing SUSTOL trial

SUSTOL REGULATORY STATUS

20 SUSTOL NDA Status • Submitted NDA in May 2009 under 505(b)(2) filing pathway • Received Complete Response Letter in March 2010 • FDA raised major issues in multiple areas Resubmitted NDA in September 2012 • CMC: correction of PAI issues and revision of one in-vitro release method • Requirement for Human Factors Validation Study with commercial product • Re-analysis of the existing Phase 3 study using the ASCO 2011 guidelines for categorization of MEC and HEC – Received Complete Response Letter March 2013 raising three main issues:

21 How We Are Addressing the CRL • Chemistry, Manufacturing, and Controls – Sites with PAI issues have been eliminated from the supply chain, with work transferred to a well-established site with no PAI issues • Transition is complete, with secondary benefit of improvement in the COGS – New in-vitro release method has been developed and validated – Multiple validation batches of finished product have now been completed • Human Factors Validation Study – Successfully completed • Re-analysis of Phase 3 using new ASCO 2011 Guidelines – Re-analysis complete – Complete dataset and programs supplied to FDA and found acceptable • Re-submission will include MAGIC study, which is expected to complete enrollment in 1Q2015, with a resubmission shortly thereafter

CINV FRANCHISE COMMERCIAL OPPORTUNITY

23 Commercial Opportunity Summary Market • Heron has the opportunity to establish a long-term, dominant position in a CINV market targeting 3.6M units of IV 5HT-3 and NK-1 annually • The NK-1 market grew 10% YOY in 2013 with significant opportunity for increased penetration into MEC regimens Competitive Landscape • New branded, injectable agents will be well-positioned to gain significant share as current market leaders (Aloxi, EMEND) lose patent protection • SUSTOL positioned to be the only branded injectable 5HT3 on the market following Aloxi’s patent expiry in 2015 • HTX019 anticipated to be similarly positioned following EMEND’s patent expiry in 2019 Go-To-Market Strategies • Differentiate SUSTOL and HTX019 clinically to drive uptake • SUSTOL targeted to be the first and only injectable 5HT3 indicated for the prevention of acute and delayed CINV in both MEC and HEC • HTX019 has potential to differentiate vs. IV EMEND based on polysorbate 80-free formulation • Leverage a highly synergistic CINV portfolio to maximize return on investment • ~600 practices account for ~90% of both Aloxi and IV Emend use in clinic segment • SUSTOL-targeted practices are the highest users of IV EMEND • Highly leveraged cost effective commercial footprint

24 Heron has the opportunity to establish a long-term, dominant position in a CINV market that has over 3.6M penetrable units Aloxi Emend 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 Q2'06 Q4'06 Q2'07 Q4'07 Q2'08 Q4'08 Q2'09 Q4'09 Q2'10 Q4'10 Q2'11 Q4'11 Q2'12 Q4'12 Q2'13 Q4'13 Injectable Drugs for the Prevention of CINV Number of Package Units Sold by Quarter ALOXI ANZEMET KYTRIL KYTRIL Generic (GRANISETRON) ZOFRAN ZOFRAN Generic (ONDANSETRON) EMEND Data is Package Units; Ondansetron units reflect only 2 mg/ml and 32mg/50 ml strength sizes

25 New branded, injectable agents will be well- positioned to gain significant share as current market leaders (Aloxi, EMEND) lose patent protection Candidate Class Indication Sponsor Possible Launch AKYNZEO Oral FDC combines netupitant (NK-1) with palonosetron (5HT3) Prevention of CINV in MEC/HEC Eisai / Helsinn Launched Q4 2014 Generic palonosetron IV 5-HT3 MEC – acute & delayed CINV HEC – acute CINV TBD (multiple) Q4 2015 (TBD) Ongoing litigation Rolapitant Oral / IV NK-1 Prevention of delayed onset CINV in MEC/HEC (to be used in combination with 5-HT3) Tesaro Oral mid-2015 IV Q3 2016 Generic fosaprepitant IV NK-1 Prevention of CINV in MEC/HEC (to be used in combination with 5-HT3) TBD (multiple) Q1 2019 2014 2015 2016 AKYNZEO (oral) Rolapitant?? (oral) Rolapitant?? (IV) 2017 2018 2019 fosaprepitant patent expiry palonosetron patent expiry

26 SUSTOL would be the first and only injectable 5HT3 indicated for acute and delayed CINV in both MEC and HEC favored by more than 50% of oncologists Attribute Favor IV Aloxi (1-2) No Preference (3) Favor SUSTOL (4-5) Avg. (N=66) Effective for prevention of delayed CINV in assoc. with HEC 3.65 Is long-acting, with an extended PK profile 3.62 Provides consistently durable efficacy for over 5 full days 3.53 Effective for prevention of delayed CINV in assoc. with MEC 3.48 Has low rates of breakthrough CINV 3.47 Minimizes amount of rescue medication required 3.44 Demonstrates sustained efficacy over multiple chemo cycles 3.44 Effective for prevention of acute CINV in assoc. with HEC 3.32 Well tolerated, with a low risk of side effects 3.32 Effective for prevention of acute CINV in assoc. with MEC 3.27 MD PMR Q29: Please rate the extent to which you favor SUSTOL versus IV Aloxi (palonosetron) on each of the following attributes using a 5- point scale, where 1= Strongly favor IV Aloxi (palonosetron) over SUSTOL and 5 = Strongly favor SUSTOL over IV Aloxi (palonosetron) [SS] 11% 8% 6% 5% 8% 8% 8% 3% 6% 6% 52% 59% 55% 50% 42% 42% 41% 47% 38% 33% 38% 33% 39% 45% 50% 50% 52% 50% 56% 61%

27 HEC Regimens Represent a Significant Market Opportunity for SUSTOL and HTX-019 1 IntrinsiQ data from July 2012 – June 2013 497,256 1,463,558 451,490 111,696 HEC MEC LEC Minimal - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 497,256 317,915 188,988 - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 Annual HEC administrations Untreated with IV 5HT3 Treated with generic IV 5HT3 Treated with Aloxi HEC regimens account for ~20% (500K) of palonosetron administrations Of all HEC administrations, ~20% are given without concomitant IV 5-HT 3 – inconsistent with clinical guidelines

POST-OPERATIVE PAIN PROGRAM

29 Goals for Pain Program • Develop products that provide a clear advantage compared to available therapies • Take advantage of the FDA’s current focus on reducing the use of opiates • Main goals of therapy for our post-operative pain program – Significantly reduce: • pain intensity for 3-4 days post-operatively • opiate use • length of hospital stay • hospital readmissions due to pain • Target for product – Easy to use for a large variety of procedures – Does not require refrigeration or special handling

30 Biochronomer Bupivacaine/Meloxicam Significantly Superior to EXPAREL at 24-72 Hours 1. Study #1; All studies used the post-operative pain model in pigs from Castle et al, 2013 EPJ 2. Study #2 compared <½ expected human dose of Biochronomer bupivacaine/meloxicam formulation to the human dose of EXPAREL (40% smaller incision used with EXPAREL) Pig Post-Operative Pain Model (n=4 pigs, except at 120 hrs for Study #2: preliminary results from 2 animals) 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0 0 1 3 5 24 48 72 96 120 HOURS Saline Control (1) Biochronomer Bupivacaine (1) Biochronomer Ropivacaine (1) Biochronomer Bupivacaine + Meloxicam (2) Exparel (2)

31 Next Steps for Post-Operative Pain Program • Phase 1 enabling toxicology completed – no issues • Complete Phase 1 SAD in 1Q15 • Quickly initiate Phase 1b/2 studies 1H15 based on Phase 1 SAD • Completing toxicology for nerve-block and orthopedic indications to allow expansion of program

POST-OPERATIVE PAIN PROGRAM COMMERCIAL OPPORTUNITY

33 U.S. Post-Operative Pain Market Source: Decision Resources, Post-Operative Pain Pharmacor, May 2006; Decision Resources, Acute Pain, December 2012 • Treatment options have remained stable over the past decade and new therapies are expected to be dominated by reformulations of existing molecules • The total number of procedures is anticipated to increase 3% per year driven by aging population • Unmet needs include longer-acting local anesthetics, opioids with a more tolerable side-effect profile and less addictive properties, and less invasive delivery mechanisms 2012 Post-Op Pain Market (US only) 2021 Post-Op Pain Market (US only) 2012 Total: $3.1B 2021 Total: $3.6B Strong opioid analgesics; 53% Simple analgesics; 11% Opioids; 9% Selective COX-2 inhibitors; 9% Local anesthetics; 9% Traditional NSAIDs; 9% Antiepileptic Drugs (AED); 1% Strong opioid analgesics; 51% Simple analgesics; 13% Dual-Acting Opioids; 8% Selective COX-2 inhibitors; 5% Local anesthetics; 11% Traditional NSAIDs; 9% Antiepileptic Drugs (AED); 1% Novel Emerging Agents; 2% Dual-Acting

34 > 72 hour Duration of Action Seen as “Ideal” by Physicians, With 48 hours Minimally Acceptable Ideal Duration of Efficacy for Long- Acting Local Anesthetic Minimally Acceptable Duration of Efficacy for Long-Acting Local Anesthetic Source: Decision Resources Post-Operative Pain Physician Research Initiative 2014 (N=30 qualitative interviews; N=184 quantitative survey) 48 hours 27% 72 hours 46% 4 days 9% 5 days 4% >5 days 2% 48 hours 45% 72 hours 11% 12% 24 44% 24 Hours Hours

35 Across Procedures, Many MDs Expect the Use of Long-Acting Local Anesthetics to Increase Use of Long-Acting Local Anesthetics in the Future, by Procedure Percentage of physicians indicating how frequently they expect to use long-acting local anesthetics in the future “Minimizing opioid use by using long- acting local anesthetics is the trend. I think the long-acting local anesthetics have great promise in the future.” – General surgeon Source: Decision Resources Post-Operative Pain Physician Research Initiative 2014 (N=30 qualitative interviews; N=184 quantitative survey) 10% 7% 5% 9% 6% 6% 5% 2% 7% 6% 7% 5% 3% 7% 3% 53% 60% 45% 62% 58% 58% 66% 44% 60% 60% 50% 41% 49% 47% 49% 37% 33% 49% 29% 36% 37% 28% 53% 34% 35% 43% 54% 48% 46% 48% 0% 20% 40% 60% 80% 100% Cesarean Section Cholecystectomy (outpatient) Arthroplasty knee (outpatient) Other non-OR therapeutic procedures on musculoskeletal.. Treatment, fracture or dislocation of hip and femur (inpatient) Other fracture and dislocation procedure Repair of toe Arthroplasty shoulder Other therapeutic procedures on muscles and tendons Cholecystectomy (inpatient) Arthroplasty other than hip, knee, shoulder, or elbow Hernia (outpatient) Hip replacement, total and partial Hernia (inpatient) Arthroplasty knee (inpatient) Less frequently Same amount More frequently

HTX-003 LONG-ACTING BUPRENORPHINE FOR CHRONIC PAIN AND ADDICTION

37 30-Day Buprenorphine Comparison to Competitive Products in Development* *RB Pharma is from US2013/0210853; Camurus data from US2013/0190341

38 Repeat Dose Model* Therapeutic range *Prediction based on 15 mg dosed monthly Excellent PK profile for once monthly dosing Cmax achieves steady state by second dose

39 Partnering Opportunity for Long- Acting Buprenorphine Products • Projected sales of products for opioid addiction to reach $3B by 2020 • Recent deals for buprenorphine products show significant interest in the space: • Titan license of Probuphine to Braeburn (12/17/2012) • 6 month sub-dermal implant for opioid addiction with NDA submitted • $15.7M upfront, $180M milestones with double-digit royalties • Camarus license of CAM2038, long acting buprenorphine to Braiburn (11/20/2014) • Phase 2 program for opioid addiction and pain, with exclusive rights for North America and option in Asia, Camurus retains ROW • $20M upfront, $131M in milestones with mid-teen royalty HTX-003 Target Product Profile • 30-day zero-order release of buprenorphine with single sub-Q injection • Low peak to trough variation allows for stable drug levels • Administered by medical professional with very low potential for abuse by patients

40 Financial Summary Summary Statement of Operations (In thousands, except per share data) Nine Months Ended September 30, 2014 Revenue $ – Operating expenses 55,066 Other income (expenses) (677) Net loss $ (55,743) Net loss per share $ (2.17) Condensed Balance Sheet Data (In thousands) September 30, 2014 Cash and cash equivalents $ 86,212 Total assets $ 92,282 Total stockholders’ equity $ 81,008 1 Based on 25.7 million weighted average common shares outstanding for the period ended September 30, 2014 (1-for-20 reverse stock split in JAN2014). 1