Oppenheimer analysts have raised their price target for Heron Therapeutics’ on the long-term sales potential of the San Diego biotech's HTX-011, a treatment for postoperative pain that aims to reduce patient dependence on opioids.
Heron Therapeutics received Breakthrough Therapy designation Thursday from the US Food and Drug Administration for HTX-011. Breakthrough Therapy designation accelerates the development and review of drugs that treat serious conditions and show signs of offering major improvement over existing therapies.
“The FDA's breakthrough designation of HTX-011 implies a belief that HTX-011 possesses substantial benefits over currently available products. Based on the volume of positive data and FDA optimism, we believe that HTX-011 will have deeper market penetration and could demand premium pricing to PCRX's Exparel,” Oppenheimer analysts wrote in a note released Thursday night.
“We adjust our model accordingly,” they added.
READ: Small-Cap Snapshot: Heron Therapeutics shares rocket after it receives positive FDA response to pain treatment HTX-011
Bearing the new developments in mind, the analyst estimated HTX-011 peak sales of US$1bn in the long-term and increased his price target to US$50 from US$34.
HTX-011 is a long-acting, extended-release formulation of the local anesthetic bupivacaine in a fixed-dose combination with the anti-inflammatory meloxicam for the management of postoperative pain.
Heron unveiled positive results from two mid-stage studies of patients having knee replacement or breast enhancement surgery. Study 209 was a Phase 2b clinical study in patients undergoing total knee arthroplasty to evaluate the safety and pharmacokinetics of HTX-011 locally administered into the surgical site.
On the other hand, Study 211 was a Phase 2b dose-finding study in patients undergoing breast enhancement to evaluate HTX-011’s efficiency when administered via ultrasound-guided lateral and medial pectoral nerve block before surgery.
HTX-011 achieved the primary endpoints in both studies.
Shares were up slightly to US$40.24.
While this does not ensure FDA approval, it’s certainly an extremely important independent indicator regarding HTX-011’s benefit relative to other available therapies
“Our conviction for Heron Therapeutics lies in its post-surgical pain opportunity where we view HTX-011's positive Phase 3 data as supporting the case that HTX-011 has a compelling and differentiated product profile relative to Pacira Pharmaceutical Inc.’s (NASDAQ:PCRX) market-leading Exparel,” wrote the analysts. “In addition, we believe that the HTX-011 program is highly de-risked.”