Earnings call transcript: Heron Therapeutics Q1 2026 results miss forecasts, stock drops

Heron Therapeutics reported a challenging first quarter for 2026, missing both earnings and revenue forecasts. The company posted an EPS of -$0.04, double the expected loss of -$0.02, and revenue of $34.7 million, falling short of the $39.28 million forecast. The stock reacted sharply, dropping 16.94% during open market trading, reflecting investor concerns over the financial results and ongoing challenges.

Heron Therapeutics faced a difficult Q1 2026, impacted by severe weather conditions and supply chain challenges. Despite these setbacks, the company managed to demonstrate resilience in its product lines, particularly with ZYNRELEF and APONVIE, which showed significant year-over-year growth. The company’s efforts to recover from the initial quarter’s setbacks are visible in the March sales figures, which surpassed $15 million.

Heron Therapeutics reported an EPS of -$0.04 against a forecast of -$0.02, resulting in a negative surprise of 100%. Revenue came in at $34.7 million, missing the forecast by 11.66%. This performance highlights the significant impact of external disruptions and cost pressures on the company’s financial results.

The market reacted negatively to Heron Therapeutics’ earnings miss, with the stock price dropping 16.94% during open market trading to $0.98 from a previous close of $1.24. This decline reflects investor disappointment and concerns over the company’s ability to manage ongoing challenges. The stock’s movement contrasts with broader market trends, indicating specific concerns about Heron’s performance. According to InvestingPro data, the stock’s movements are quite volatile, with a beta of 1.71. Despite the sharp decline, InvestingPro’s Fair Value analysis suggests the stock may be undervalued at current levels, presenting a potential opportunity for investors willing to weather near-term challenges.

Despite the Q1 challenges, Heron Therapeutics remains optimistic about its future prospects. The company plans to expand its sales force in Q3 2026, targeting areas with strong product demand and payer coverage. Additionally, the company anticipates margin normalization as it clears high-cost inventory from its secondary supplier. Analysts share some optimism, with price targets ranging from $3 to $6, suggesting substantial upside potential from current levels. The company maintains a healthy current ratio of 2.48, indicating liquid assets exceed short-term obligations. For investors seeking deeper insights, InvestingPro offers comprehensive analysis including 8 additional ProTips and detailed Pro Research Reports covering HRTX and 1,400+ other US equities, transforming complex data into actionable intelligence.

Craig Collard, CEO of Heron Therapeutics, highlighted the temporary nature of the Q1 challenges, stating, "The severe weather in early 2026 created significant headwinds, but our March performance signals a strong recovery potential." He emphasized the company’s strategic initiatives, including product line expansions and sales force growth, as key drivers for future success.

During the earnings call, analysts inquired about the timeline for inventory normalization and the expected impact of the sales force expansion. Management reiterated their confidence in resolving supplier issues by Q2-Q3 2026 and highlighted the strategic importance of expanding their sales team to drive future growth.

Conference Call Operator: Thank you for standing by. Welcome to the Heron Therapeutics Q1 2026 conference call. I would now like to hand the conference over to your first speaker today, Melissa Jarrell, Vice President of Legal. You may begin.

Melissa Jarrell, Vice President of Legal, Heron Therapeutics: Thank you, operator. Hello, everyone. Thank you for joining us on the Heron Therapeutics conference call today to discuss the company’s financial results for the first quarter 2026. With me today from Heron are Craig Collard, Chief Executive Officer, Ira Duarte, Executive Vice President, Chief Financial Officer, William Forbes, Executive Vice President, Chief Development Officer, Mark Hensley, Chief Operating Officer, and Kevin Warner, Senior Vice President, Medical Affairs, Strategy, and Engagement. For those of you participating via conference call, slides are made available via webcast and can also be accessed via the investor relations page of our website following the conclusion of today’s call. Before we begin, let me quickly remind you that during the course of this conference call, the company will make forward-looking statements. We caution you that any statement that is not a statement of historical fact is a forward-looking statement.

This includes remarks about the company’s projections, expectations, plans, beliefs, and future performance, all of which constitute forward-looking statements for the purposes of the safe harbor provision under the Private Securities Litigation Reform Act of 1995. These statements are based on judgment and analysis as of the date of this conference call and are subject to numerous important risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The risks and uncertainties associated with the forward-looking statements made in this conference call and webcast are described in the safe harbor statement in today’s press release and in Heron’s public periodic filings with the SEC. Except as required by law, Heron assumes no obligation to update these forward-looking statements to reflect future events or actual outcomes and does not intend to do so.

With that, I would now like to turn the call over to Craig Collard, Chief Executive Officer of Heron.

Craig Collard, Chief Executive Officer, Heron Therapeutics: Thanks, Melissa. Hello, everyone, and welcome to Heron Therapeutics’ first quarter 2026 earnings call. Today, we’re thrilled to share our financial results and provide commercial updates on our business. I’d like to begin by highlighting several key accomplishments. Coming off a strong fourth quarter 2025, we entered the new year with tremendous momentum. As expected, the first quarter of any year historically brings seasonal headwinds driven by co-pay resets and insurance adjustments, and this year was no 1 exception. However, 2026 presented additional challenge for us. 2 weeks of severe weather early in the quarter that significantly compounded the typical seasonal softness, making January our most difficult month since I joined the company. The impact of the weather was felt most acutely in elective surgeries, which are highly sensitive to extreme conditions and saw a sharp decline during that period.

Importantly, this was not an isolated experience. Multiple publicly traded pharmaceutical and surgical companies have reported the same weather-driven disruption across January and February. The breadth of this industry-wide impact validates that the headwinds we faced were external and temporary in nature, not reflective of any underlying weakness in our business or markets. Despite this, the team responded well. February brought a clear upward trend, and March closed strongly with over $15 million in net sales, demonstrating the underlying strength and resilience of the business. While the weather undoubtedly weighed on our Q1 results, it has not shaken our confidence in the year ahead. We fully expect the remaining deferred elective procedures to be rescheduled throughout the remainder of 2026, creating a meaningful tailwind as we progress through the year.

This aligns with our historical pattern where Q3 and Q4 consistently represent our highest volume quarters. We anticipate 2026 will be no different. Turning to our acute care portfolio, we delivered revenue growth of 32% compared to the same period last year, with ZYNRELEF growing 27% and APONVIE growing over 50% respectively. Two structural drivers are worth highlighting. Our Ignite program, the incentive program with our orthopedic distribution partners, has been very successful. We’re continuing it into 2026 as a key growth driver for ZYNRELEF. With APONVIE, we are beginning to realize the commercial benefits of its inclusion in the fifth consensus guidelines for the management of postoperative nausea and vomiting, a meaningful clinical endorsement that we believe will serve as a sustained tailwind for adoption.

We will provide additional detail later in the presentation on the strategic and commercial implications of that inclusion. Turning to our sales force expansion, implementation is on track for the 3rd quarter with the recruitment already underway. We will walk through the strategy in more detail in the presentation. Moving on to oncology, we continue to deliver solid performance with CINVANTI despite increased competitive pressure. For the quarter, CINVANTI maintained exit market share of 25% in the NK1 category, and although net sales reflected normal quarter-to-quarter timing, CINVANTI itself has remained resilient, demonstrating strong customer loyalty and continued demand even in this very competitive landscape. We have a number of new accounts coming on board in Q2 that we anticipate could add upwards of $10 million in net revenue on an annualized basis.

We will cover this in greater detail as part of the commercial performance update. Before I turn things over to Mark to cover our commercial performance, I want to take a moment again to recognize the entire Heron team for their performance this quarter. We fight every day in a very competitive environment, and this quarter offered other challenges that we had no control over, yet our team continues to persevere and move forward. I will now turn the call over to Mark to cover our commercial performance. Go ahead, Mark.

Mark Hensley, Chief Operating Officer, Heron Therapeutics: Thanks, Craig. Moving to product performance, starting with our overall net sales picture for the quarter. This chart shows quarterly net revenue for each pro