Heron Therapeutics, Inc. (HRTX) Earnings Call Transcript & Summary

Good morning, everyone. Welcome to the first ever Heron Therapeutics Investor Day. I'm maybe bouncing around here a little bit. I'm pretty excited to have everybody in the room and I see a lot of friendly faces. So we really do appreciate you coming out today. Again, the purpose of today really is to try to give everyone a little more insight into what we're doing, I thought it would be a good opportunity for a lot of you to meet us face-to-face. I know we do a lot of things virtually now and so forth. So I think what you'll gather from today is you have a lot more insight into the business. We'll talk a little more about the products, some of the things coming. But more importantly, get a chance to know each other and learn a lot more about Heron. So before we get started, really talking about the future of the company. I did want to spend a moment and talk about sort of what's happened over the last 12 months and really how we sort of came to be in this company. So back in February of 2023, Velan Capital and Rubric got together and negotiated with a cooperation agreement with management. And that was really to facilitate change. I think what everyone saw in this business was an oncology franchise that was doing quite well. But clearly, there were some headwinds that were faced with ZYNRELEF. And now that I've had a chance to be here a while, I would say that where the company, I think, stumbled a bit was pivoting when we didn't get the label that we had anticipated, COVID hit, there was a number of factors that happened all at one time and the company really had not gotten to the point from a financially being managed standpoint where I think we were able to pivot to really be in a commercial organization. Shortly after I joined the Board in February with Adam and Velan, it was decided to make some changes at the management level. So that's when I came into play. I joined the company in April and then really began to sort through the business. And the one thing that I do want to mention here that I want you guys to take when you leave this room is that we have gotten things under wraps financially and got our hands around this as we like to say. But the main thing that I think the company lack that we have brought is really accountability. And accountability to the financials, accountability to each other and really managing this business. And I think you'll see that as we go forward. But the one thing that I want to try to relay as we go through the day, and we'll talk about the clinical value of the products and so forth. But when I first was exposed to Heron, it was at a national sales meeting when we were launching APONVIE and I'm 2 weeks into this as a board member. And I was really amazed as I talked to the salespeople, again, the company is -- I don't want to say in disarray, but there's a lot of things going on change wise. And yet, I've got reps coming up to me telling me exactly how great these products are and what they do for patients. And I was expecting something different, I guess. And so I'm hoping, as you leave today, you get that little bit of sort of special sauce that we see on a daily basis that again, we're trying to communicate, and we're seeing it happen internally. But I'm hoping that today you leave with that as well, and you kind of understand a little bit more about sort of the passion and the people here which is really what drew me to this initially. So, again, just looking at some of the events that happened last year. Again, when I joined, it was pretty clear that we needed to do some things from a management team level, just changing the culture, changing the way we did things. But the 2 biggest, I think, events that I walked into and tried to really change were, as we looked at commercializing products, the manufacturing agreements we had in place were just not -- I couldn't go back and rip up every contract, but we're able to renegotiate some things with Patheon, Adam and I made a trip over to Austria. We visited every manufacturing plant we had, and we're able to really change some things there. And I think you guys have now seen that that's being reflected in COGS and better gross margins and so forth. The other thing was that, again, we really didn't have a forecast in place nor did we have any pathway to profitability and so the spins seem to be endless. And so we were able to put together a forecast, find a path to profitability and to determine how much money we would need to get there. And so we did a $30 million equity financing, followed up by debt financing of $50 million, and we brought $25 million of that down. The takeaway from all of that is that we have enough cash now to get to profitability and beyond outside of any type of M&A or something like that. So again, the company is really well positioned financially. The really other 2 big events that, again, we're going to dive into a lot today is, one, expanded label, which we finally got and having a label now that certainly competes in the market. And then really the big deal is with CrossLink. And I'm going to go into this more as we go through the presentation. But needless to say, we are more than pleased with that agreement and I really think it's going to be a huge change for the company as we move forward. I want to spend a moment and talk about our management team. And again, I know a lot of companies put slides like this up. I want to point out a couple of things that I do think are unique. If you look at the first 2, Ira and I, so we've worked together now for 15 years in sort of the CEO, CFO role, and we've had 2 successful exits at 2 companies, and this is our third together over that time frame. So the point of this is it's a lot easier to come into a situation like this, make change -- exactly, it has a kind of a yin and yang effect to that. I'm not sure if we would call ourselves yang or yin. But anyway, so we hit the ground running and worked quite well together. The other 2 people I want to mention here is Ryan Craig and Melissa Jarel. Both of those guys worked with us at Veloxis, again, kind of putting the band back together type of thing. So again, very easy to communicate. They know what to do. When we talk about budgeting processes and that type of thing. They know how we function. So it's made it extremely easy. One thing that we didn't have that we're able to add, and I want to talk a little bit about this person's background is Bill Forbes. So Bill heads up all of our development here at Heron and, he'll laugh about this, but locally in our area, Bill was really what I think a lot of people would say were the brains behind Salix Pharmaceuticals. And he was responsible for 14 approvals there. The reason I bring this up is that we're going to talk a lot about what we're doing commercially and how we're going to move forward. But this company has the capability to do a lot more than that. And again, as we look down the road and think about acquisitions and doing things that will allow us to stay profitable. We also will move into development and look at things that we can add to the pipeline and certainly have those capabilities. So again, we feel like we have -- I know we don't like to use the term rock star anymore. But I think we do really have a rock star when it comes to development. Outside of that, Rob Sullivan and David Barozzino kind of are the, if you will, legacy employees that we brought in. I think the success that we have on the oncology side speaks for itself. Rob's team consists of a few folks that have 30 years of experience on this side of the business. And his group really has a lot of capacity to do other things, again, as we look at M&A and things like that or certainly things we could do product-wise on that side. And Rob is just doing a phenomenal job of leading that team. David Barozzino, we were laughing at these slides, he's the only one not smiling. And I think, hopefully, when we have this next year, the products have taken off and he has a big smile on his face. So -- but in truth, when we promoted David in October, it really changed the face of the company from a standpoint of linking that sales force to the new management team. And we were having a tough time with that. Imagine, we're coming in, we're making all these changes, people are leaving and so forth. And David was really key in that. And if you look at kind of the product growth since then in all of our products, things are really beginning to change. And again, we're going to talk more about that. But I think David has really been a key in that. So the last and certainly not least is Kevin Warner. Kevin comes from the clinical side. He was a KOL for us, he's done a lot of speaking. He probably has more experience with these products than any of us. And he was really the missing piece to our team. I think you guys are going to hear Kevin speak here shortly, and I think it will speak for itself when you heard him talk about the products and his knowledge and so forth. So the point of all this is we have a team, I think that works very well together that has worked well in the past, and we've put the missing pieces to this team to really position the business to move forward. Okay. I showed this slide on our last earnings call, but I want to bring it up again just to really show the impact and, again, talk about sort of where we were and where we are now. When I joined Heron, I think we were in the 220 employee range. And we're now -- we'd like to settle in kind of 140 range. I think we're now at like 125, 126. But with that, we were able to increase revenues year-over-year, if you will, from $29.6 million to $34.6 million, as you can see on this slide. I talked initially about when I joined the company was getting inventory management in place and really improving our COGS by negotiating with our manufacturers. I think the numbers speak for themselves. We've gone from a 43% gross margin to this past quarter was 76%. So it's really changed the face of the business and allowed us to certainly create that pathway to profitability. If you look at the expense management, again, we've had a $28.2 million turnaround in 12 months. So what I would tell all of you who are investors in this, we're doing the right things, we're going to continue to do the right things as far as managing the financials. And again, if you look at the cash position, we're in a pretty good position there in order to have enough cash to get to profitability and beyond. Now a lot of you may have been hoping today that we were going to change our guidance. I just wanted to really reiterate this and really talk about it a little bit. We put this out in, I think, Q3 of last year for '24. And again, we gave a pretty wide range on revenue. Reason being, at that time, we knew we had a pretty consistent business on the oncology side. But if you think about ZYNRELEF and APONVIE, and as you see, as we go through this, you understand sort of how these things could range a bit. I mean, at that time, we weren't sure about CrossLink. We were in negotiations, but we didn't know if we would have to get that deal done, which again, we know will have a huge impact. The VAN, we're still moving along. And again, at this point, we have some surety around that, which we'll talk later. But -- and then the label, none of that had happened yet. And so for us to give that sort of range was really based on ZYNRELEF and APONVIE. So, again, we're hoping, as we go through the year, we'll be able to update this and hopefully improve upon that a bit. Again, just mentioning gross margins, we were at 76% last quarter. I think, ultimately, we're going to sort of narrow in around the kind of lower 70% range and we'll improve upon that a little bit as we go beyond that. OpEx, we gave a range of $108 million to $116 million. Again, I think everybody has done the simple math of multiplying by 4 from this last quarter, which would take you to the low end of this. We have not changed that yet. But again, we're hoping to certainly stay to the lower end of that, which will allow us to get the profitability even quicker. And from an EBITDA standpoint, again, we gave a range of negative $22 million to $3 million. And again, I'll restate this again, we do plan to be profitable in Q4 of this year. Okay. Before I jump off here again, I just want to talk a little bit about what we want to accomplish today. We think we have something very special with these products, and they really are different clinically. And very soon now you're going to hear our speakers talk about this. And I think, again, I want you guys to take -- really look at these products in this market. And we're hoping to not only show the differentiation, if you will, with these products, but to really give you a line of sight to what does this market look like. I mean, you can talk about things like how there's 60 million procedures, and we're going to get a piece of that. But we want to really try to give you a little more detail on how we're going to get there and what that looks like and the timing and so forth. And so, again, I think you'll leave here with a clear line of sight into really what the potential is for some of these products. Again, CrossLink, I get a lot of questions about this. We have the guru in the room today with Mr. Thomas Fleetwood. He's the CEO at CrossLink, and I think he can give his perspective on what this has looked like so far and just really his experience in the market as good if anybody, if not better. So I think we'll give you a lot of insight into CrossLink and how that's going. We're also going to update you on the VAN and the prefilled syringe. Again, we got a lot of good news there and things are moving along. We'll also spend a little bit of time on the oncology franchise. I know there's some questions about the ANDA, and we really want to put sort of -- so you can see really visibly the consistency of where we think this is going to head for the future, and hopefully, we can clear up any questions on that. And then really last, again, I mentioned the management team before. But the one thing that I want you guys to see if here as people speak and you see this is that we really do have a special team together that truly does function as one to hopefully deliver shareholder value to all of you, which is hopefully why we're here today. So with that said, I thank you for your time. And I'm now going to turn things over to Ryan.

Thanks, Craig. I appreciate that. So I just wanted to take a quick second and characterize the rest of the day. As Craig mentioned, you're going to get a good in-depth view of our clinical differentiation of our portfolio, but I also want to talk a little bit more about the team that we have in place. As Craig mentioned, my experience, I spent 15 years at Salix Pharmaceuticals, and that was really my first entry into pharmaceuticals. I was an inside sales representative, transitioned into marketing operations and then in-line brand marketing. Throughout those 15 years, I sort of call it like the juice, you're building something special. And I felt like every 12 to 16 months, we either had a new indication, new label, new acquisition, again, led by Bill Forbes and his effort. At Veloxis, we got the same experience, right? I spent 5 years with this team, with Craig and Ira and Melissa, Ingrid, et cetera, building something from the ground up. And that's the team that you have in place here is those people that are looking for those opportunities. So as soon as I found out that Craig landed at Heron and started to pay a little bit closer attention to the team that he was putting in place, I'm the one that reached out to Craig immediately and said, I really want to be a part of that. And there was a couple of reasons why, it was about the people that he was pulling together. At that point, he had already pulled over Ira, he had pulled over Bill Forbes, and I said, "Oh, man, these are leaders that I want to be a part of, and I want to follow". And then you look in depth at our clinical portfolio and you realize we have a really good asset in our portfolio that is going to help a lot of different people. So commercializing these products is a fun ride for us. I think as you look throughout the day, you're going to find that the past 6 to 9 months as this new team has been in place, it's really foundation building for what we're going to deliver in terms of revenue. Our portfolio makes a lot of sense in a lot of different areas. So as you know, we're sort of split in 2 different areas, oncology care and acute care. But what we really do is contribute to patient outcomes following these really important procedures or circumstances that they're in, right? Whether it's chemotherapy-induced nausea and vomiting on the oncology side or post-op nausea and vomiting on the acute care side or post-op pain, right? So we're trying to make these sort of severe, complicated issues a little bit easier on patients and a little bit better on patient outcomes. If you look at our overall revenue contribution over time, despite all the changes that we've had over the past year as an organization, you can see we still maintain consistent growth. The oncology base of the business is strong. You see that growing year-over-year. Quarter-over-quarter, Q1 '23 to Q1 '24, we had over 17% growth as an organization. So over time, and as we continue to leverage APONVIE and ZYNRELEF and grow those businesses, you're going to see this continue to stack on to an already strong base of business in the oncology franchise. So with that, I'd like you to hear a little bit more about our clinical story from Kevin Warner, Randy Robbins and Alan Rechter. Come on up.

All right. Thanks, Ryan. Thanks, everybody, for being here today. It's my pleasure to be standing in front of you as part of team Heron. I made the jump 3 months ago to come be part of Heron and be part of something bigger, clinical pharmacists by trade. And I had the pleasure of launching ZYNRELEF at my institution had 2.5 years of experience with it, and that's why I'm here today. We also launched APONVIE, which was another key cog in our wheel as far as what our facility is doing, enhanced recovery for our patients. Today, you're going to get to hear from 2 experts besides myself, you're going to get an entire health care envelope, if you will, from a facility basis, you're going to get the pharmacy, anesthesiologists and a surgeon. So it's going to be a great picture for you guys to peer into why we believe the commercialization of these products is going to happen, but more importantly, how we see it as the foundation, the foundation of health care and how our systems are kind of transferring. So we're in the space right now where everything is about same-day discharge and throughput for our facilities, right? But we have to do the right thing for our patient we have to provide the appropriate analgesia. We have to provide the appropriate post-op care and rehab and support for these patients to get them out of our facilities through the facility, home safely with a good recovery, right? And so Heron Therapeutics, as we talk today, is going to be this focus on these 2 acute products right now, but they are the foundation of that recovery. So when we look at our products, our patients come to us and their 2 primary concerns when they walk through the door, they want to know is it going to hurt and I don't want to vomit after surgery, right? So when you rank these things on a list, that's what patients tell you. They don't want nausea vomiting, and they don't want pain, right? And Heron therapeutics has the 2 best-in-class products, that's a strong statement, but we have the literature back that up. Two best-in-class products for post-op pain and for post-op nausea vomiting, our patient's 2 primary concerns. And we talk about that throughput for the institution, those are also the 2 most common things that keep our patients in the hospital. And they kind of go hand-in-hand. Once our patient starts having pain, that's what they reach out for, the opioids. What opioids cause? Nausea and vomiting, urinary retention, things like that, so on and so forth, where we can't get the patient out of the hospital. So we need to stop or prevent those things from occurring to maintain the financial viability of our institutions. Both these products also connote themselves to the institution as far as ease of access and use. They're both ready-to-use products, essentially. So as far as pharmacy throughput being there in the omni cells, being able to go into an ASC, an ambulatory surgical center, it doesn't require compounding or excess staff to provide these products to the patients. And they're also long acting. So this is another differentiator. A lot of times, we start to think acute care, acute phase, control their pain. But when these patients are out of sight, they shouldn't be out of mind. So we're moving these patients faster through our facilities now through these same-day discharge models. But just because they go home, they shouldn't be out of our mind as far as are we controlling that pain? Are we controlling that post-op nausea vomiting. So importantly, about these products, for ZYNRELEF, we have 72 hours of postoperative pain management. For APONVIE, 48 hours of PONV prophylaxis. So these patients are out of our facility, but they're not out of our mind and we're still providing that recovery for the patients. So now, we're going to go into ZYNRELEF first and I get the pleasure to introduce Dr. Alan Rechter, orthopedic surgeon. He's going to speak to his experience and the impact it's having for his patients.

Well, thanks for having me. I was involved, actually, in the clinical trials. So before this was a ZYNRELEF, it was HTX-011. I have a high-volume ortho practice. And we do essentially this is kind of the trend. Everything has gone outpatient. So it's amazing. And since 20 years ago in my training, you used to stay in the hospital 5 days, you had a joint placement, now you come in, you get it home and you go same day, you're in your bed that night for good reason. They kind of figured out that the patients in the hospital are the sick ones. So the infection rates were higher and whatnot, so things have really kind of migrated in that trend. And then with -- clearly, with the issues they've had with inpatients, when they had the coronavirus that was pushing people towards getting out of the hospital as well. So we saw a lot more people doing outpatient surgery. So then you said we got to be able to control their pain. So the problem was that they had this gap, they called an efficacy gap. But what that meant was -- we had good local anaesthetics. We've always had them. They were good for short, 6 hours, 8 hours, but we really needed something to go longer. And the problem is, if you think about this in terms, and I describe it as such, if you went to the dentist and had your tooth pulled, you know you're going to look like a chipmunk for 3 days. That's the inflammatory thing that everyone expects to see, but that happens everywhere. So the problem is you've got 3 days to try to cover and you've got these 12-hour products and then you have this gap. So the gap was solved with the ZYNRELEF because, finally, now we have a product that's going to go for 3 days. We can get people through that 3 days. And when they said, why is it 3 days anyway? I mean, Heron said, we could have made this thing go for 30 days, but they had talked to a lot of the surgeons and they talked about that 3-day inflammatory window, which is the critical period to get people covered. And if you can just put them on the back side of that, they just do so much better. So this really solve the problem that they have. So if you haven't seen it, this is ZYNRELEF, it is the first and the only extended-release dual-acting local anesthetic. It really comes in a box, which you can see out there and open it up, very stable. It can stay basically in a box for 2 years, but it's designed to fit into some of the delivery machines. It's got a novel synergistic combination. So when people say, what is it? It's things that have been out for a long time. So when we're discussing with doctors, when you bring them that's something completely new, everyone's always skeptical about it. But bupivacaine has been around 20 years, meloxicam is probably the #1 go-to red and anti-inflammatory that we have anyway. So people know both of these very, very well. So you go, what makes it special? It was Heron's polymers, that Biochronomer polymer, that they developed that will then break down and deliver that product over a 3-day period. And by the use of it, it has found to reduce or eliminate these of -- the narcotics. And interestingly, when we were doing the trial, we had patients that had go through a knee replacement, we'd see him in the office and the guy said, "I didn't take any pain bills." I said, no way. You never saw that before. There was never a patient, I would tell you, I've been 25 years in practice, that had gone through a knee replacement, that didn't take one pain pill, no, never saw it before. So we knew in the trial, this stuff works. And we could tell it worked based on that. So we said this stuff really does its job. So again, the timing was good and bad. Obviously, the coronavirus came at the beginning of it, but it really was during the opioid crisis. So before corona was in the news every single day, it was the opioid crisis, opioid crisis. This was actually there, and it was solving that big problem. From an administrative standpoint, it's easy to apply. It comes in a single dose. It's a needle-free application. It's just spread into the tissues. It doesn't require any fancy mixing some of these other products, you have to mix them. It takes a lot of time to do it. And from a pricing and distribution, all this for a brand-new product, it's really competitively priced. So if you, again, haven't seen it, it's there on the end of the slide there, it really looks like a honey-based consistency. We compare it to the gold standard, which is bupivacaine or if you look at the liposomal. So some of the things with those bupivacaine was fine, but again, it worked well. It just didn't last long enough. That was kind of the problem with it. Liposomal, it was better. That was something that would go for 24 hours, maybe 36 hours, but those were really in the blocks. What they were kind of finding is in the surgical side, they would last about 24 hours. So again, you weren't getting through that 72-hour period that we were needing to cover, but the ZYNRELEF did. And interestingly, the reason why it works so well, if anybody has ever had an abscess or seen somebody with an abscess that they're kind of these big hot boils, painful, you go to the doctor, you're like doc, you got to numb this thing up and the doc will say I will, I'm happy to do it, but unfortunately, the local anesthetics don't work when they're very acidic like that. That's an acidic environment. That's what happens. So what they figured out was when you do surgery, you're creating a bit of an acidic environment. So the problem is in every single patient that's having surgery, they have this little bit of an acid doses at the surgical site, well, guess what, the local anesthetic who already learned, they don't work very well there. But the meloxicam that's in the ZYNRELEF will normalize the Ph. When you get the Ph to be normal, then all of a sudden, the ZYNRELEF works. In fact, if you look at some of the slides that the company has, they would show, they took the Biochronomer polymer, first, and they loaded it just with meloxicam by itself, and it was definitely better than the placebo. And then they did the Biochronomer polymer just with the bupivacaine, and it was better than that. But when you put them together, there was a synergistic effect. Why? Because you finally got the acid doses under control and now you've got a product that can go for so long. So even with liposomal bupivacaine, as they're getting more acidotic because you're not controlling it, there's no meloxicam in there, you see that there's a limited effectiveness of that product. So this is actually a video that we shot, I'll show it to you and then I'll just talk a little bit about the evolution on the application of it. [Presentation]

So that actually was a little bit of an evolution in the application. So during the trial, the protocol was to make sure you put it everywhere. So we have the joint wide open and you would squirt it deep in the tissues, and it was important to get it in the very back of the knee. In fact, for knee replacement in the portfolio, when they added the knee replacement to it, they actually had a whole separate arm that was different because they -- a lot of the orthopedic surgeons said, I think a lot of this pain that people are getting is coming from the posterior capsule in the knee. So it's critical, let's make sure we get this in the posterior capsule. So we spent all this time getting it around the joint and posterior capsules [indiscernible]. We didn't need to do that. So what we learned, which we showed in the video here, is the product will self spread. And once it gets into there and it gets the body temperature, it starts moving around the joint like crazy. In fact, the first few times I tried it, I put it in, then I reopen up the suture line to the dismay of my PA to do it, but I want to see what it does and you take it through ranges of motion, it goes everywhere. So the posterior capsule, where you're spending time making sure you got in the posterior capsule, I would say, it's like the oil and the pan of the car. It's going to end up in the posterior capsule. Every patient is coming out of the operating room is supine so everything is draining into that posterior capsule area anyway. We're getting terrific coverage. So really, the new application technique, they're so nice because you're really just closing just like normal. You have a little bit of a window in there and everything is going through small little windows and it just self-spreads itself and it does terrific. So as far as the development phase, it started out with the Phase II. And really, those were really more bunion trials in the open [indiscernible] trials. When they went to the Phase III, they kind of added the total knees as with the EPIC trials that you saw there. Around that time, they were just coming out with what they call the non-opioid MMA. So interestingly enough, if you just add -- it was acetaminophen so a [ tunnel ] type product and [indiscernible] or an ibuprofen type of a product there and just alternated them. Those are the non-opioid MMAs, the pain relief was incredible. It really just augmented the effectiveness of any type of medication. So you're seeing people that were taking a lot of pain medicines coming down. But if now you had a Heron product in there with a ZYNRELEF, like I said, that's when you're starting to see some of these patients saying, "No, I never took any" and again, we had never seen that before. And then it ended with the HOPE, which is a hernia trial. The goal in that trial is just to see if they can send patients home with no narcotic pain medications, and in greater than 90% they were able to do that. So to sum it up for my part here, we do believe that ZYNRELEF will likely form the foundation of postoperative pain management. Again, it is the first and the only extended-release dual-acting local anesthetic and we talked about really, in essence, how it works so well. It's designed to really work on the inflammation at the surgical site with the meloxicam as base in the product. And then that allows the bupivacaine to do its thing. And the special part of that, again, is the Biochronomer polymer that Heron developed. As far as from a pain relieving standpoint, it is something that we have shown that it will go for 3 days. It's a 72-hour product, truly is. In fact, we had heard about some of these other things that go that long. They just never really did. And again, when we had nothing else, a day, a day and a half is much better than what we had, but we now have something that actually really will go for 72 hours. As far as, obviously, the opioids and the issues that go with it, as Dr. Warner mentioned, when people are taking pain killers, you have constipation, nausea, vomiting, things like that. So as we can get those numbers to come down, then the patients are doing better, and all the hospitals are trying to get satisfaction score. So it's big for them to make sure that their patients are getting out of there and having a good experience. And this has been able to really help with that. As far as the application, again, this comes really -- it's in a vial that needs to be drawn up. They're starting to move towards a prefilled syringe which will make things a whole lot nicer, but it's really not that hard to do it now anyway. There's so much happening in the OR for the scrub tech to draw that up that's easy. Application is super simple to put in. And again, with the new techniques that we found out, just get it in there. It will spread itself around and it does such a great job that it really doesn't change and it doesn't add more time to surgery. And then again, from a value standpoint, and I guess they can talk a little bit more for a product that came out a s brand new. When I started talking to docs about it. Number one, it's not very expensive. Two, because the federal government was trying to incentivize companies to get away from opioids, they have a pass-through status where there's some reimbursement for these. So a lot of these hospitals that are actually using the product can file and actually get reimbursed on these. So for a lot of them, they can actually trial it for nothing. All right. I'm going to turn it back over to Dr. Warner.

Thank you, Dr. Rechter. It's amazing stuff. Just as we've seen in our institution, I'm just going to take you guys through a couple of real-world trials here because, as health care providers, as scientists, we remain skeptics. Sure, Heron goes through the process with the FDA, proves it once, proves it twice, proves it 3 times, literature comes out in the hospitals, the institutions, the providers, they say, "Well, show me against this, show me a comparator, what's it like in the real world? Can I replicate that, right?" So it's important always to look at the evidence and reveal the evidence to see where it stacks up in clinical practice. So the first poster presentation you see there is by [ Dr. Shah ] and the comparator in that group is liposomal bupivacaine, brand name for that is Exparel. So Exparel came to market back in 2012, and it touted the extended-release profile that had that goal. Did not receive that label from the FDA, though, a lot of people still implement it, hoping for that extended analgesia. So ZYNRELEF, the first product with the extended-release label for the FDA came to the market, and so many people wanted to compare it. How would it change practice? And in this result, you're seeing quicker transfer to the [indiscernible] further ambulation, higher same-day discharge, less pain at discharge, less opioids used and less severe pain. And to me, severe pain is one of the strongest metrics that we look at for our patients and most impactful. And why is that? Because severe pain is when they reach for that opioid, when they start taking that opioid, now they have the opioid-related adverse events, severe pain is when they won't get up and get out of bed and do that physical therapy. So severe pain really starts that snowball that impacts that patient's length of stay acutely, but also changes the future perception of pain for that patient throughout the rest of their life. So the amount of pain you experienced during the perioperative phase, from the extent and duration of it changes how much pain you experience forever. Your body remodels those pain receptors as soon as that insult starts. So controlling that pain, moderating the pain. It's never going to be zero, especially in total knee trials, but getting a baseline that's stable, that you don't have to use the crutch, the opioids, that changes that quality of life for that patient ever ongoing. The next poster you see there is against what I consider the standard of care. The standard of care historically is the generic joint cocktail we would use in the TK. So it's a combination of anesthetics, NSAIDs, some epinephrine. It works really well. It works really well for 12 to 18 hours. So when we see ZYNRELEF come through the clinical trials and beat bupivacaine for opioid reduction and pain reduction. We said, "Well, we got to give this a try. We've got to give our patients this opportunity to have 72 hours of analgesia versus the 12 to 18 our cocktail would provide. We are really interested, though, how are they going to impact the patients or what was it going to look like at our 8, 12, 24 for those patients when it was stacking up against our cocktail and the efficacy of the cocktail. We're very happy to see our results, we saw a 50% reduction in their opioid use and about a 1.5 point difference in their pain scores. So that's statistically significant, but also clinically significant for our patients. So they're using less opioids and having less lower pain scores and a lot of that was in the acute phase that first day for those patients. So we're seeing a lot of impact early on, knowing that we could rely on this and send those patients home, discharge them in that stable condition. So beyond the clinical impacts here, you see a nice list there to a comparator. I know analysts love comparators and setting benchmarks and looking at things. And so the only other option in the market right now that's touted as long-acting is Exparel, liposomal bupivacaine. But you can see the clinical differences there from the clinical trials, the major pivotal Phase III and IIb clinical trials ZYNRELEF, greater pain reduction through 72 hours versus bupivacaine, lower opioid consumption, less severe pain. So all those check boxes are for ZYNRELEF. Then you look at the economics because, finally, from a holistic perspective, economics matter in our health system. So we look at safety. We look at efficacy. We documented all that. But how does the pull-through, look, what do the economics look like surrounding a product like this? Obviously, there's the soft cost with length of stay and throughput for hospitals. But just on a hard cost perspective, you have lower acquisition costs. And you also have the favorable reimbursement pieces. As Dr. Rechter mentioned, we have pass-through status. So it means it's paid for outside of our bundled DRG payments that we typically rely on in the institution. So that's a separately billable item for our HOPD patients and for our ASC patients. So ZYNRELEF is the standard of care now at many institutions and hopefully becomes the standard of care as we develop more evidence and get information out there. So that's our new foundation for multimodal pain management. But there's 2 arms to [ ERAS ] that I really look at. And the 2 things that keep patients in the hospital besides post-op pain, it's post-op nausea and vomiting. So highly undesirable, but also an under-recognized problem. When we looked at PONV in our institution, it was almost 30% was our PONV rate, pretty shocking to realize. It's likely because we have segregated providers and not everybody is seeing that patient or following that patient all the way through their experience. You have some [ pre-op ] providers, and you have [ intra-op ] surgeon, it's really the [indiscernible] nurses feeling and seeing that PONV or your nurses on the floor. Maybe the surgeon doesn't witness it. But anesthesia, they're the ones that's often termed responsible for the PONV patients. So I'm going to introduce Dr. Randy Robbins, anesthesiologist, and he's going to take you guys through APONVIE.

Thanks, Kevin. Yes, I'm an anesthesiologist and we take a lot of blame. I think the surgeons blame everything on us once they leave the OR because we don't ever see them again. But I will say, I stand today as a physician that practices -- I agree from about 40 providers, and we do almost 40,000 cases a year. So we do mostly outpatient stuff, but I'm also a post-op-nausea patients. So I get horribly ill when I have general anesthetic, I puke from my toes every time. So this is very near and dear to me. And they talked about this, pain and nausea are the 2 biggest things that patients are concerned about. Nausea is always their #1 concern, nausea and voting. If you ask a patient, you give them $100 and say, "Hey, what do you want to spend your money on to not have in the perioperative period?" They'll spend over $30 on post-op nausea and vomiting alone because there's nothing that's more miserable than having a knee replacement or having jaw surgery or having your tonsils out or having abdominal surgery and then go into the recovery room and vomiting for 2 or 3 hours. And I think that one of the things that Heron has done that's really great for this is they've really taken it beyond that immediate acute phase. Because the worst thing for us as providers and facilities is if we get a patient under control in the Phase I or Phase II and then send them home and the second they get in the car, they get halfway home or they get home and start throwing up, all they hear is all you cared about was getting me out of your facility and you didn't care what happened to me when I got home. And that's a huge, huge patient dissatisfaction piece for us. And we all know as providers in these facilities, payments now tied to satisfaction. So that's a big piece for us. And when I can go to a patient now and say, "Hey, I've got a drug that I can give you one time and get you 2 days of treatment for postop nausea and vomiting because I care what happens when you get home, it changes the world for them. A lot of the other things you look at from a burden standpoint, like we talked about the unmet need for pain control, I really think it's an unspoken need from a postop nausea standpoint. Like they said, we don't see, as anesthesiologists, we don't want to hear about a problem we can't take care of. So I think that what's happened in this is we just have about a 30-plus percent experience with post-op nausea that the [indiscernible] nurses just don't call us about because they know we've already written every drug we can possibly give them. All we can do is support, hold their hand and say good luck. So now that things changed for us. And when you go to the anesthesiologists and ask about post-op nausea, they may say, no, no, my patients don't throw up, we do a great job. Then you walk across the room and go to the [indiscernible] nurses and say, "Hey, you got a post-op nausea problem, they said, "Oh, yes, we have a post-op nausea problem." In our center, we have 4 ORs, 2 procedure rooms and 4 [indiscernible] base, which means if one of those [indiscernible] base backs up at all, it basically runs our entire morning. So if we have someone that throws up for 30 or 45 minutes, that's going to back up everything in the OR and [indiscernible] time cost a ton of money, probably $15, $20 a minute. It's expensive place to be and it costs a lot of things to have those kind of delays. The other thing is if patients go home and start having nausea, a lot of times they end up back in the ER. For us, as an ASC, that's a reportable event to the government. So if we have someone that goes back to the ER in the first 24 hours, we have to report that back. And if you have a certain number of those in a year, it becomes a big issue, and you have to go under a different review. So there's a lot of things that tie to post-op nausea and vomiting beyond just patient satisfaction even. The problem is what have we done to treat it? There's a lot of different receptors. You'll see that in a couple of slides here. But really, this one here, when I saw this one, I think this molecule really makes a huge, huge difference as far as where it hits and how it prevents things. It really prevents the vomiting piece very, very well. The oral formulation has been out for quite a while. But what's crazy is the lack of knowledge about that molecule. I think we've done a really good job so far. I think the company has kind of stepped into that and tried to work with that education piece and introduce this molecule. I spoke to a group of 16 providers on Monday night, 3 of them had never heard of the molecule before. So by far, the bulk of people don't even know about the molecule, much less this ability to deliver it. Because when we've got an oral formulation, in our world, a lot of times, I don't see a patient until 3 minutes before they go back to the OR. If I'm having to use something oral, that's going to take 5 hours to take effect, it's borderline irrelevant in my acute care there. But if I now have a drug that comes in, in 5 minutes and has 97% receptor activation and really makes a difference. When I see the patient and they say, "Doc, I throw up every time I have anesthesia, is there anything you can do for me?" I can now with confidence say, "I actually do." I can tell you, we've given about 90 doses of this drug in our center, and they're all high-risk patients that we've done because we don't -- it's really a selective process. Not one of those patients has thrown up in our center so far. So this drug has made a massive, massive difference for us. The other thing that I think is changing now when you look at it and everyone, if you watch the news and read everything, the Ozempic-like drugs. We know that those GLP-1 agonist and stuff. We know what they're doing for weight loss and everything. What we don't see is -- what you don't see is what it's doing for anesthesia. It's making a massive, massive change in how we approach patients in the perioperative period. Because of the delayed gastric emptying that those patients are experiencing, they're at very high risk for aspiration. The ASAs come out with specific indications about how to manage those patients and how to work through those patients. But the bulk of patients that are on those, a lot of them don't even tell you about it until you walk in the morning of surgery. So we're really having to take that patient population and treat them even more specifically for post-op nausea and vomiting. Again, when you look at prevalence, probably 30% of all patients are going to have some kind of post-op nausea and vomiting, even if you treat them with our kind of common drugs like Zofran and Decadron and stuff. Those patients that are higher risk and the things you look at, are they female? Are they nonsmoker? Do they have a history of post-op nausea and vomiting or motion sickness and are they going to get opioids in the perioperative period? Well, you can look at this and understand that probably half your patients are going to be considered moderate to high risk. And that's really where the art side of our anesthesia comes in is how many of those 65 million cases a day -- a year can we, as anesthesia say, okay, these are the patients that we really feel like adequately meet a criteria to use a drug like this. And it's probably in the 20 million number there, somewhere about 1/3 of those patients probably deserve to have something like this on the front side. Now we don't have a treatment indication with this drug yet. But I think that's something that we've got a lot of providers look at and nurses and stuff that explore that, too, and look at. So I think that as you explore that, we go forward with that, that number could even increase with that. But as you go, if you have 2 risk factors, you really should use 2 drugs. If you have 3 or more, you really should hit multiple receptors and use 3 or more drugs. I think this is kind of a pictorial representation of the actual consensus guidelines. So this is all the folks that work in the perioperative period that have come together and said, okay, what can we do to mitigate PONV and how do we address this as providers in our centers. You look at the risk factors like we just talked about, there's different things we can do from an anesthesia standpoint, regional anesthesia. We don't use nitrous hardly at all anymore because of the nausea piece of that. We look at opioid sparing, which is where we get things like ZYNRELEF that make a huge, huge difference for us from that standpoint. But there are certain things that when it comes down to if we've got to put someone sleep, we've got to use general anaesthetics then we have to mitigate the risk for that post-op nausea. And like I said, if they got 1 or 2 risk factors, you typically are going to give a couple of agents that's usually going to be Zofran and Decadron, when you get to 2 more risk factors, that's when you start looking at multiple, 3 or more agents. And that's really where we add that aprepitant molecule in and that's where APONVIE comes in and makes a huge, huge difference, I think. From a rescue treatment, that's been probably the biggest space we've had an issue with historically. There's just not a great drug to treat the rescue piece of that, and hopefully, we'll see some of that change as we continue to get experience with this drug. So this is APONVIE, it's the first and only IV NK1 antagonist for the prevention of post-op nausea and vomiting. Like I said, superior vomiting prevention. So you look at probably almost an 18% improvement on vomiting alone out to 48 hours with this drug versus other drugs. It was rated the most effective single agent. So like I said, we use multimodal approach. But if we did go to a single-agent therapy, this would be the one that's been proven to be the most effective. It's great for us as anesthesia providers. We hate anything that we have to mix and hang and let us sit there for 20 minutes or 30 minutes. This is a drug that we drop and we get as soon as we push the drugs. So it's easy for us. It makes sense for us, and it makes our patients very, very happy because, like I said, this gets dropped in our laps all day, every day. So when they go see the surgeon on post-op day 2, how did you do? Well, my knee is great, everything, but I puked for a day and a half, that was anesthesia, sorry. So -- and we're not there -- we don't ever get a chance to say that really wasn't us because it probably was from that standpoint. But I do -- and when you look at pricing, this is the only drug that's treated for post-op nausea and vomiting that's actually reimbursable by CMS, too. So that is a huge, huge piece for these facilities. When you look at the cost of a post-op nausea experience, it can be extremely devastating for a facility and for the patient. So this is something that really makes a huge, huge difference. So these are 3 different studies we look at for kind of real-world efficacy. The first one is a aprepitant versus ondansetron or aprepitant with ondansetron versus ondansetron alone, almost a 3 -- a little over a threefold reduction in vomiting with aprepitant, with Decadron, which is something we use -- we use Decadron for a lot of different things, but one of the things that it's great for is nausea versus ondansetron, which is Zofran with Decadron alone, still twice as good as what we see with those 2 alone. And then when you look at aprepitant versus Zofran plus Decadron plus another third agent, you still see a markedly market improvement in PONV and vomiting and reduction with aprepitant alone. I really -- like I said, we've given this drug to lots of folks, and they're all high-risk patients. When we brought it into our facility, some of the administration was a little hesitant and everything, and I said, tell you what? Give us 20 patients, and you pick the 20. You find the 20 patients that you think are the highest risk patients for stopping your flow, you give them this drug and see what happens. And like I said, those 20 flew through, not one of them vomited, we're now, I said, close to 90 to 100, still have not had one that vomits. We still have some nausea that we deal within the [ pack ] but this drug, I just -- I cannot envision a scenario where this drug is not the cornerstone and standard of care therapy for post-op nausea in the next 18 to 24 months. It just -- it's performed that good. And I think once the education piece reaches out to the physicians and they understand the molecule and understand what we can provide as physicians, I think it's going to be really, really hard to not justify giving this to the right patient population. Like I said, this is the study they looked at. It was a little under 600 studies and almost 100,000 patients that showed a aprepitant was the single best and most effective molecule for preventing vomiting up to 24 hours. And I think that really has been replicated and been shown to us clinically and continues to push forward with what we've seen day-to-day in our practice. So I'm going to turn it back over to Dr. Warner here and let him discuss the ERAS protocols and everything from there.

Thank you, Dr. Robbins. Excellent. So just to give you guys a brief view here of what it looks like on an institutional level. We hit all the high points there. I do want to mention one thing, the name APONVIE is wonderful. So these drug companies making these -- it's an acronym, its a aprepitant for postoperative nausea vomiting injectable emulsion. So PONV is actually in the name, so it's easy for people to remember. So one of the best names I've ever seen for a pharma drug, just note that. But looking at it from a P&T perspective, we're always weighing the pros and the cons here and you heard all the pros already, the benefits, the efficacy of it, the single most effective agent. But again, with this piece, sometimes it gets overlooked that 48-hour duration. So all of our other antiemetics that we typically use, they work for 6 hours, 8 hours. So again, that patient is out of sight, but not out of mind. We're still managing that PONV, hopefully not having a readmission to the ER for a complication. On the cons side, with anything we would look at it, we'd evaluate it. Cost becomes a cons section just when you look at comparables because we're in a generic market for PONV prophylaxis or vomiting treatment per se. So those drugs cost pennies, Zofran, dexamethasone. So it becomes a con here. But as you pointed out, it's reimbursable currently has that same pass-through status that ZYNRELEF does, so it's reimbursed outside of that surgical bundle. Overall, not a high-cost drug, about $58 a dose. So for the impact it can have when we're evaluating it cost efficacy, one episode of PONV as noted cost about $1,000 to your institution between the length of stay, rescue anti-medics, clean up on aisle 5, all those pieces that go into vomiting when that does occur. So drug interactions, has a couple of drug interactions that we're mindful of, but things that we can educate around, not really problematic there. So basic formulary add, they're going to add it for that moderate to high-risk patient population. Those patients that have those risk factors, which is pretty easy, about half of our surgical population ends up in that high-risk portfolio. So these patients putting this in as the foundation as that third agent. One of the biggest things that I always point out is the safety profile of this. The antiemetics that we have, they have a lot of overlapping side effects and they become additive for our patients. So when we looked at the guidelines that Dr. Robbins showed, so we need to give 3 agents to these high-risk patients that becomes a safety risk for a patient. APONVIE doesn't have those common side effects, does not share those side effect profile. So it makes it that nice piece, that nice foundation to our PONV prophylaxis. So to wrap up this section here. So we got 2 new foundational elements for enhanced recovery after surgery protocols really impacting our patients, me personally, I would not have surgery somewhere if I couldn't receive both of these products if it was a major surgery. So looking at ZYNRELEF, we got some tailwinds coming from ZYNRELEF. So the significant label expansion that just happened in January, and it takes time for these things to evolve after that label expansion. So formularies can re-review it, what the label now includes how they can adopt it. It's more than just more indicated procedures and more providers, possibly more champions, bring it into institutions, but also allowing these institutions to now substitute, not have multiple products on their shelf for various disease states but have one product that can be utilized in many places. So now with the broad label, essentially being all soft tissue and orthopedic procedures. It allows for that formulary adoption or substitution for a whole hearted switch. The CrossLink partnership, this is awareness, you're going to hear a lot about it today, but it's awareness, it's boots on the ground, it's education. So a lot of people don't know what ZYNRELEF is yet. So it's not the foundation of multimodal analgesia. But as they get educated as we get those contacts and they learn about the product and you see the clinical impact and impact, we're going to see it become that standard of care. So opioid stewardship, we all turn on Netflix, the news, and we see opioid story after opioid story. We lost 110,000 people in America last year. So it continues to be a problem and will continue to be a problem until we change the paradigm, right? And ZYNRELEF is one step in changing that paradigm but we have our major accrediting bodies pushing us along also saying, what are you doing for the opioid epidemic? What are you doing for that problem? Do you have an opioid stewardship program and what do you provide for your patients? So to be accredited now, you need to participate in these impactful elements. The opioid settlement, as you're aware, big pharma got slapped these settlement funds. $53 billion was just distributed throughout the United States that has to be spent on awareness, treatment and prevention. So more awareness around products like ZYNRELEF or opioid alternatives, if you will. And finally, we have the NOPAIN Act. That's coming in 2025, Q1 and what that's designed to do is provide reimbursement for non-opioid products that are proven to reduce opioid consumption. ZYNRELEF obviously qualifies for that. ZYNRELEF is already reimbursed, but this will continue to provide reimbursement for ZYNRELEF all the way through 2027, it's planned, and we expect that to continue on. I don't believe the government will back off a program like this once it's out there and they're providing that reimbursement. I don't think they're going to revert back and say, we're no longer going to provide coverage for non-opioids. So it's also going to bring along the commercial payers. They typically follow CMS and they want to be on the right side of that fence also. So more and more commercial payers will be providing this reimbursement outside of our bundles, making this an economic advantage to include ZYNRELEF and get the clinical impacts at the same time. For APONVIE, it's really education and awareness. So you've seen it's a best-in-class agent, #1 most effective Antimetic there is, it's the only long-acting agent, it suits itself to that perioperative space for our primary users for anesthesia with APONVIE. So the PONV guidelines, there's a new update coming. So likely, we'll be able to get a name mentioned in there. That will really boost the awareness. But otherwise, it's out there telling the story, showing the impact that this can have for patients. Finally, it's the GLP epidemic, if you want to call it. They estimate about 10% of our population is going to be on a GLP 1. So that's pretty wild to think about those numbers, 10% of the patients on new will go [ Ozempic ] utilizing GLP-1s. But as Dr. Robbins said, these are high-risk patients because of that decreased transit time to higher-risk aspiration and complication. So they're automatically in that group that needs 3 agents on board. And there are also continued risk so having something that's 48 hours, you could basically blanket, say, all these patients, they should probably be getting APONVIE for the surgical procedure and oral is not an option for these patients because we're seeing the complications with other oral medications in these GLP-1 users because they don't absorb medications like a normal patient with normal GI transit. So big population there, big numbers of patients that would likely benefit from APONVIE. So 2 foundations for us for post-op pain and post-op nausea vomiting, true game changers, and we're shifting that paradigm to these become the standard of care. So we're going to open it up for some Q&A from the group here for Dr. Rechter, Dr. Robbins. Any questions?

Brandon Folkes from Rodman & Renshaw. Maybe just a question for I think it's Doctor Rechter. You talked about the new technique that it's changed a lot. Is that changing the amount of ZYNRELEF you're putting into the patient?

It hasn't changed that actually. It's just really from a delivery standpoint, it just made it so much easier because the one thing when you're dealing with surgeons, number one, the guy is very good, hopefully, because he's done it so many times. And the one thing which you're always saying don't change what you do. You're good at what you do because you've done it a million times and you do it this way and whatever. So the whole key is this is something that's done normally at a step where we normally would put in some type of a local anesthetic. So as he mentioned, we were doing before they had ZYNRELEF, we had these other injectables when we inject these all around that area. So we would implant, let's say, watch before we close and then we start closing. But that's the point we're putting in our local anesthetics to try to give them some relief when their -- for the post-op period. For us, we're trying to get them home. We really want them to get out of the hospital, so we want something that's going to work like that. So the timing was perfect. We were putting in just like we always had before, but it didn't really change the amount because if you think about it, it's weird. The guy comes into the office with a really swollen knee and you stick a needle in there, you could drop 150 ccs and you go, well, what's 14 ccs, because that's what the big dose is going to do. it works. You get it in there. That 14 spreads around and coats the entire inside of the joint. So you're still putting the same amount of product that's in there, you're just putting it through a much smaller window and letting it do its thing once it's been placed.

Carl Byrnes from Northland Capital Markets. You talked a bit about the efficacy gap. I'm wondering if you could also expand a little bit on how much time you think you save in the OR with respect to infiltration [indiscernible] versus Exparel in terms of injections there? And how might that improve with the VAN and the prefilled syringe down the road?

So it's -- really, it's a great question. The Exparel, again, when we had products that were going for 6 to 8 hours, we said, hey, we got something now that's going to maybe go 1 day, 1.5 days, we were happy with that. We did know that we had a we had a 72-hour window to cover. So maybe the discussion was, "Hey, listen, you're going to get out of here and say, I feel pretty good. I'm like, yes, you do because you got this medicine working. But what's going to happen to you is tomorrow afternoon sometime it's probably going to come a lot. So we would always kind of get them ready for that. So then all of a sudden, we had ZYNRELEF and we said, "Hey, we're going to put this in, in it's place anyway. This basically didn't add any more time because, remember, it really was changing what we were doing at the time they called it [ REX ] solutions, but everyone had some injectable that they were putting in there anyway. So the [ REX ] solutions like 300 milligrams. So these big syringes with big needles and you're trying to squeeze it all around the femur and the tibia and here and whatever. So it was taking about the same amount of time to put that and then to put the ZYNRELEF, and now the little window technique. I mean when we first were doing the trial, we were really focusing on making sure you get it here and get it there. And we found out we don't need to do that. So if anything, it's been a little bit quicker using it in the technique that we're doing now. And you can imagine, in the OR, every minute is super expensive. So that really helps to kind of get it in there and let it do its thing. And again, from an effectiveness standpoint, then it's really taken it to the next level and it's been so effective for 3 days that, for me, again, everything, hips, knees, shoulders, you get a shoulder placement, you're going to be staying in the hospital 4 or 5 days, now people are going home the same day. But finally, if I can get them on the backside of the inflammatory phase, they really come to the office in a totally different state. In fact, one thing which we saw, this was -- it was anecdotal. But when we have patients that were coming during the trial period, we had patients that were in trial people that weren't -- so the people there in the trial, we'd walk in the room, the guy would be moving his knee like crazy, and that's important when you have a knee replacement, hips a little bit easier. When we say it's very technical for the doctor, easier for the patient. Knees, they're not that hard to put in, but they're hard for the patient, the incision is in a terrible spot. Nobody wants to bend it. But if you can get their pain under control and the fear factor, they just don't want to bend it, they start moving it like crazy. So we are seeing, from a motion standpoint, I could tell who was in the trial and who was getting the product and who wasn't based on motion alone. So it just had so many benefits that we saw there after the fact.

Serge Belanger from Needham & Company. Dr. Rechter, with the implementation of the NOPAIN Act starting 2025, do you expect that will lead to a significant change in how you use a ZYNRELEF or an Exparel across the board since it will kind of simplify and broaden the reimbursement of these products?

So the fact that it's got reimbursement now is terrific. But really, it's my opinion. There's no reason why you wouldn't want to use a product like this in any area that you're going to use a local anesthetic. I mean if you think about it, again, from what we talked about from the science behind it, I mean, even [indiscernible] gets a laceration in their knee, they come to the emergency and they've got a big cut. They're going to get bupivacaine, which is fine for 4 hours and they get home, their stitches, they start getting swelling in the area. With the swelling it gets more painful, the local wears off so, what do they do? They have to resort to the opioid medication. So of course, I think in areas like that, it will get adopted more and more. The reimbursement part is terrific. I mean at that point right now, that it lets people trial it. But if you think about it, what it's been doing is we've seen the #1 spend in all these hospital systems outside chemotherapeutic drugs was basically liposomal. It was an Exparel product, it was super expensive. So now you've got something that, number one, it's less expensive than that for sure and right now can potentially be free, depending on the setting of it. But I do think that it may encourage more hospital systems then to say, "Hey, listen, we want to try this thing anyway first, we know that we've got until 2027 and probably, as they were saying from the NOPAIN Act that it will probably go on even beyond that, I think it may incentivize some of these systems to start thinking of let's try it, let's see what it's all about, so probably so.

Any other questions? All right. Great questions. Appreciate everyone's time. I'm now going to turn it over to Dr. Bill Forbes, our Chief Development Officer.

Thank you, gentlemen. I get the fun part. First of all, I'm the only thing standing between you and break. So I'm going to cover some ground here. I want to thank Craig for the introduction earlier. I was thinking the other day, I think Craig and I met for the first time in 2011. I get this question all the time from internal employees. They're like, how did you and Craig meet. And when I answered, I go, we met on a basketball court and they look at me and they go, what were you doing on a basketball court? Well, that's one of life's great mysteries. So I'm going to zoom forward to May of last year, and May of last year, when I met Craig, I knew he was a type of CEO I wanted to work for, but it didn't come together until May of last year when we started talking. And June is when I was hired. But there were a number of things that Craig wanted to accomplish in R&D. And so we started having that discussion. One of the things was cost cutting. So it was -- we have objectives that we need to obtain or achieve, but I need you to cut the cost because there's too much bleeding coming from R&D. And I said, "Well, I don't know if you've looked at my resume, but I'm not really known to cut costs. I'm actually -- I've had a CFO tell me I'm the enemy of EBITDA". So he said, "Don't worry about it. I've got this great CFO coming in, and you're going to love her because she's going to help you cut costs" and in comes Ira and we achieved it. So I think you saw in an earlier slide where Craig had mentioned R&D costs and cuts we were able to achieve that. But we also had to press forward on a number of other things. This slide actually highlights for you all the 4 compounds that are marketed at Heron. And as you can see, Heron first got SUSTOL approved in 2016, CINVANTI in 2017 and then ZYNRELEF is coming in at 2021. There's been 3 approvals for ZYNRELEF, as you know. So one of the things that he needed in June of last year is he needed to make sure that we got that sNDA 2 approved. Now Craig gave me a whole 4 months to do that, which I thought was a little unreasonable. And apparently, the FDA did to. That was actually already submitted by the time I show up. We had a delay, but it ends up getting approved in January. So that completed the development work on ZYNRELEF. And we're going to talk a little bit more about ZYNRELEF. Obviously, APONVIE, as Craig alluded to earlier, comes in, in September of 2022. So let's talk a little bit about what needed to be done. The sNDA in January, the VAN, the Vial Access Needle, was the other thing that was on the trajectory to get finished up. And there's a reason why we wanted to get the VAN in. Let me pause a little bit here and just kind of go through this. The current marketed presentation of ZYNRELEF uses a vented vial spike. And that vented vial spike is a 510(k) approved Class II device. You can purchase this off on the market. So that vented vial spike is sterile. Unfortunately, the vial itself that contains ZYNRELEF is not sterile. So this bridging of sterile and unsterile is it presents a preparation hurdle for ZYNRELEF. Now you've heard very clearly from Dr. Rechter that once the product is in the surgeon's hands or in the PA's hands, they can administer it quickly and very effectively. So it's not a problem for the surgeons and the administration of the product, but the preparation is a hurdle. And because this is a combination device, it's drug and device. The problem that we run into is that there needs to be multiple professionals involved in the preparation of it. On the left is the Vial Access Needle. One of the things that the company has done is designed and manufactured and tested this device. So Heron being a drug company and a device company, now we're talking about setting up the device portion of this and advancing it in a way that it can be used more smoothly in the operating room. So I'm going to start first with one of the problems, which is the rate of withdrawal of the product from the vial. And this is data that's on the left is from the Vented Vial Spike. And as you can see, the rate at which this is actually able to be withdrawn is a product of temperature. So as you increase the temperature you can actually withdraw it. So 25 degrees Celsius is approximately 77 degrees. We actually oftentimes warm the product to temperatures higher than that in the operating room to allow for faster withdrawal. So the vented vial spike when the original submission went in, this is the data from that. If you look on the right, this is the VAN data that we're about that will be submitted with the submission that will go in here shortly. It's not submitted yet, but will be imminently. If I draw your attention to the 200-milligram bupivacaine, 6-milligram row of meloxicam and also the 412, these are the two doses that are used most commonly. And as you can -- if you look across and you see where the VAN is on these 2 rows, you can see that the 206 can be drawn in about 18 seconds whereas if you use the current marketed vented vial spike, you're talking about 106. And if you look at the 412, you'll see that the VVS is 186 seconds versus 45. Obviously, it's about approximately twice as much because you're drawing twice as much from the 200 to the 400. So speed of withdrawal is one of the big hurdles that we needed to. It's part of the design of the VAN itself. So when the VAN is designed, it has to fulfill much of the 510(k) requirements, biocompatibility and E&L testing and things of this sort. So all of that work had to be done and overseen by Heron itself, and so that was part of the solution. The other part was ease of preparation, and I'm going to draw your attention to the top left corner here. If you look at the VVS instructions for use, you can see that the non-sterile nurse actually has 5 different things that he or she needs to do in this presentation of the current market. So -- and as you can see from the diagrams down below, if you actually look at Diagram 6, I believe it is. You can see that, at one point in time, both the sterile and the non-sterile technician are handling this product. So this is the VVS presentation, this is the VAN presentation. You see where the number of steps that are involved with the non-sterile person has gone down to essentially 2. What we're doing here is we're essentially just having them open the packaging and drop the non-sterile vial into the sterile VAN itself. At that point in time, all of the work is conducted in the sterile field by that nurse or technician. So this was the hurdle that we needed to solve and wanted to solve, and that's why we've been doing it. Many people ask us, why did it take a year to actually accomplish this? It's because, as I said before, this is a case of us actually designing, manufacturing and testing this entire process ourselves. Whereas in many times, with a 510(k) device, just like with the VVS, you're just taking it off the shelf and you're relying on that testing. This is a picture of the manufacturing, which obviously we use contract manufacturing. And then the VAN kit. As I mentioned during the break, one of the things that you'll be able to do is actually touch and feel the VAN kits that are out there for you to take a look at, so you can get a closer look at it. And this has been mentioned before, but obviously, the ultimate solution to all of this is to take preparation of the product out. And one of the initiatives that we've had obviously filing the VAN, getting that approved by the end of this year and getting it launched by the end of this year. But with the prefilled syringe, it's going to take a little bit longer to do this. And we've got an initiative on this going right now. Our hope is that we have the prefilled syringe by the end of 2026. So with that, I'm just going to pause. And I think we'll just go to break. All right, thank you. [Break]

Welcome back, everybody. Obviously, thank you for the attention this morning. Hopefully, you get a sense of why we're so optimistic and excited about what we can do at Heron. For the rest of the day, you're going to see how we view the business opportunity in front of us. And I think reflecting back to the past 6, 9 months, as we have been building this team, making some really important decisions related to the organization on how we move forward. I think we'll look back and see this as a foundational moment for our growth. So for the rest of the day, you're going to hear a lot of the experts who are leading business units. We're going to start in the acute care franchise. But first, I wanted to give you a bit of a view as to we look at the market. You've seen and heard a couple different numbers thrown at you today, but the one thing that we are for sure confident in is the $65 million in procedures done in the U.S. annually. So, obviously, that's growing about 1% year over year. But the way that we break down the acute care franchise and the business opportunity is, and you heard from Dr. Robbins earlier, about half of these procedures the patients are at high risk for PONV, so $32 million is our patient opportunity in front of us. And that's how we're assessing performance and our success moving forward. How many of these procedures are getting treated prophylactically with APONVIE. On the ZYNRELEF side, the new label expansion in January, almost doubled our opportunity. So the label prior to January 23, we had access within our indication to, about 6 to 7 million procedures with the expanded opportunity and PDUFA date of January 23. An FDA approval that almost doubled that opportunity to 13 million procedures. So we're going to you a little bit about APONVIE, first setting it up in terms of strategy and guidance here. A lot of what Dr. Robbins spoke about was those patients that high risk. One of the things that we learned as we launched and started talking about APONVIE to various institutions is, there were certain surgical lines that were more receptive to the burden. And so as Dr. Robbins mentioned in terms of talking Thank you the[indiscernible's] talking to the above the waist target surgical procedures. Very accurate EENT, neuro and plastics, these are all specialties that if there's an episode of PONV, it really affects patient outcomes negatively, so we really are hyper targeted there. In terms of our strategy and focus, it doesn't end there. So this is very much a enter through that target audience and expand within the institutional setting. So again, as Dr. Robbins mentioned, what happens is we get early experience across one of these surgical lines, let's call it, bariatrics for instance, it starts to spread a little bit through the PACU and people start asking questions about what are you using on that surgical line on those patients to prevent nausea and vomiting and then every surgical line starts to adopt. So we're excited about how this can kind of snowball over time. On the right side, you're looking at that higher risk number, again, 50% of the overall procedures and just hypothetical procedure shares over time, if we were to achieve 1% share, that's 325,000 procedures, $44 net price, you're looking at $14.3 million in net sales. So again, a small portion of business can really generate a high volume of revenue for us. And as David is going to talk about, we have specific objectives that are sort of driving to peak share within an institution is around 20%. So this is just getting started. As I mentioned, we've just started to build the foundation for these products, but I'll turn it over to David to talk a little bit more detail on how we're going to make this happen.

Thank you, Ryan. So what I'm going to do today over the course of the next 15 to 20 minutes is provide you an update from a performance standpoint for both APONVIE and ZYNRELEF. We'll talk about the opportunity that we think we have in front of us, and then I'm going to close with the progress update around CrossLink and why we're optimistic and excited about the partnership. I do want to introduce Thomas Fleetwood as the CEO for CrossLink. Thank you for being here today to answer questions and also add some comments. So turning our attention to APONVIE. If I can get you to look to the right-hand side, as Craig mentioned, one of the first things upon being elevated to the VP of Sales in September was, I recognize that there was a gap with APONVIE. And if the gap kind of consisted of -- it was twofold, right? From a clinical standpoint, I was hearing from our sales representatives that they didn't really feel like they had the confidence and knowledge to sell this product effectively like they wanted to. The second challenge that we had was I definitely think we didn't put the right emphasis or focus around APONVIE coming out of the launch. We were so focused on ZYNRELEF relief that we really didn't prioritize the right behaviors from our sales reps. So 2 of the things that we did quickly to turn this around was we put together a robust training program where we ran POA meetings in October that really focused on the ability to create the burden of cost of an episode of PONV. So we increased our reps clinical acumen, which increased their confidence and allowed them to go head-to-head versus anesthesia, directors of pharmacy and institution to share why there was a need for APONVIE. The second thing was we did was we really incentivized and pushed our representatives to get more P&T submissions because we understand and know that in a hospital institution, if you don't have formulary wins, product 99% of the time can't get used, so we really incentivize the right behaviors to drive performance. As you can see over the course of the last 6 months, 7 months, you see significant growth on the right-hand side. And I attribute that to, obviously, our refocus of the product APONVIE and putting the right rewards in place. As we move our attention to the left-hand side, you look at it from a quarter-over-quarter basis. In Q1 we grew by 53% compared to Q4. So we're starting to get that traction and it's just the beginning. What I can tell you is with 1 month of data here in April, you'll see that we did 6,660 units. We're on track and confident to do more than 20,000 units in Q2, which would be another 50% growth for APONVIE. So why are we optimistic? You can see that with the focus since Q4, we've had more than 109 formulary wins since that date. In the first quarter of Q1, we had 35 new health system wins. And to date, we have 305 ordering accounts. But our goal is to continue to fill this pipeline because we do know it takes about 3 to 4 months before accounts come online once they're approved. So how do we measure performance today and look at the opportunity in the future? So we tier our hospitals either Tier 1, 2 or 3 based on the procedural count within each individual hospital. As you heard from Ryan, there's 65 million annual procedures but our really opportunity is 50% of those patients for that high-risk patient portfolio. So within our current ordering 305 accounts, we have 31 individual hospitals or clinics that the opportunity is 887,000 patients. Now our goal internally driving the peak performance is we should own at least 20% of that market. Now some are going to do more, some one are going to do less, but we're confident that we can get at least 20%. So when we look at these instances and we look at the high performers, if we get our 20% market share, which is driving the peak performance in our high Tier 1 targets, that is worth $7.8 million. Looking at our medium-sized hospitals, 64 of them fall into that bucket, there's a potential for 600 and almost 40,000 procedures annually, 20% of that is 127,000, which is an additional $5 million. And obviously, for the low, we can do the same thing and that adds another $1.7 million. So in totality, today with just 305 accounts, we believe and know are confident that we will get 345,000 patients, which will generate $15 million in revenue. But if we really look at the opportunity, there's 12,000 ASCs and hospitals throughout the United States. Of the 32 million, we already have 1.7 million that we currently are kind of fishing in that pond, but there's another 30 million, almost 31 million patients that are out there. Our goal is to get 20% and the potential for this product could be $270 million. So I wanted to give you an example of looking at a hospital system that has made the decision to fully adopt it, right? We talked about earlier that 20% is our internal goal. But I think as more and more exposure and more and more hospitals and anesthesiologists start using this product, I think we're going to have more instances where people will fully adopt upon as part of their protocol. So this is a hospital system that has made a decision to bring APONVIE in and fully adopt it. They have 7 campuses, do roughly 50,000 procedures on an annual basis. The high-risk patients account for almost 25,000 patients. How do we know that this account has fully adopted it? On average, there's 2,070 patients on a monthly basis. Now I think it's important to notice that this just didn't happen from a P&T approval, it took some time. So this account actually approved product in August. It took about 3 or 4 months to get built up into the CPOE and the Epic system. There was also education that needed to be taken place and also protocols that needed to be implemented. So it wasn't until December that they started placing their first order. And you can see over the last 5 months, they have continued to adopt APONVIE. Today, again, we talk about 2,000 being fully adopted, they're doing 1,900. So this is an example of a hospital fully adopting it and the potential to Heron and to APONVIE, this would be a $1 million account. To give you an example of how things ramp up, obviously, on the right-hand side, you'll see that this is the previous slide that we had. We're an entire system, 7 hospitals decide to adopt APONVIE. But on the right-hand side, we just want to give you an example of 2 different individual accounts. So you'll see it's not like just turning a water, [ speak it ] on but what happens is over time, and especially once you get to the 5-, 6-month period, you can see how it starts to ramp up, and we're starting to see this happen in a lot of our other accounts as well.

Thank you, David. So quickly transitioning to ZYNRELEF, similar to APONVIE, we talk about like [ enter ] and expand approach with this product. I think one of the things I observed quickly when I joined the organization in August, we're blessed with a broad label that got broader in January. That could be a blessing and a curse from an execution standpoint, right? Because you have to make decisions strategically on where you can actually win and where you can own a space. Clearly, what you're learning from us today is that our focus in 2024 is on ortho, right? And so we plan to go in and own the orthopedic procedure space. We have a high success rate there, higher volume of units and then higher cases per procedure. So one of the things that we're going to talk about a lot today is how we're going to enter and expand driving ZYNRELEF volume within orthopedic procedures with our partnership with CrossLink, which David is going to talk a lot about. On the right side, you see how we view the market opportunity. So originally, I set this up with the 13 million procedures that were indicated for within our label out of the 65 million. if you drill down the individual procedure types and you just focus your attention to the top 2, which are the sNDA2 expansions, spine and shoulder, as well as hip and knee, which we already had the indication for, you're looking at about just over 3 million procedures within ortho. So when we assess our execution and our performance and how well are we doing, are we achieving success, these are the numbers that we're looking at, and we're looking at that $3-plus million opportunity within ortho -- or 1 million patient opportunity. You correlate that to using a blended net price of $184, $558 million opportunity within orthopedic procedures alone, expand that to all indicated procedures, all ZYNRELEF indications, you're upwards of a positive of $2.3 billion. So you can see where our optimism comes from and just the foundational footprint that we're making and the steps and the decisions we've made over the past 6 to 9 months to build from here. So with that, I'll turn it back over to David to talk a little bit more about how we're going to do this.

All right. So first, I want to just want to go over performance, I apologize about that. If you look at to the top left-hand side, you'll see month-over-month demand -- quarter month-over-month demand. So if you look at Q1 2024, we did 29,600 units; in Q4 of 2023, we did 29,829 units. So obviously, it's flat. We're not happy with that, but I do think it's important to realize that in Q1, there is seasonality to elective procedures. So typically or historically, there is a 16% to 20% drop in procedures. So on the static that we were able to maintain that business and not see that drop with ZYNRELEF. When we look at it on an annualized basis, Q1 '24 versus Q3 from a demand standpoint, we grew 30%, but from a net revenue standpoint, we grew 43%. Down at the bottom, you'll see our month-over-month since inception, and one of the things that we realized when we started talking with CrossLink or why we started with CrossLink was that we have 47 reps out in the field. We have a little bit of a bandwidth issue. You guys obviously heard about the preparation. We need to be in those cases on a regular basis. So with 47 reps, the ability to continue to expand becomes a challenge. And that's why we know that the partnership with CrossLink is really going to help us increase our trajectory because they're in those cases every single day. And I'll have Thomas share some words here in a couple of minutes. So that leads me to our partnership with CrossLink. So we signed a contract in January 7, 2024. Since then, we've been extremely busy. January, we really had to build out a robust training program specific to CrossLink. In February, we launched our online training platform to the joint team for CrossLink, which has 150 reps. They completed that training in February, which led us to them doing 5 in-person trainings and we're talking about roughly 30 to 40 individuals at each site. We did that in March, and then that joint team actually went live April 1, and I'll talk about their success that they've been having to date. Since then, they do have 2 co leads. Those co leads have been actively working to add regional distributors outside of the legacy state for CrossLink, which is North Carolina, South Carolina and Georgia. And in the month of April and May, we have already started training and implementing the distribution across the country, which I'll share with you on a few other slides. Over the next several months, I can tell you that we will continue probably 2 to 3 training classes on a weekly basis on onboarding additional regional distributors. One of the things that we have to do and we are doing is it has to be strategic, it has to be methodical and it has to be precise. So we want to ensure that we keep and have the onus on the training. So the live training is actually conducted by us in person at the different sites across the country. To give you an example of what the training looks like. On the left-hand side, you'll see what the individual, what I'll call [ metal ] reps go through. So they go through 10 hours of training, focused on 5 different sort of buckets. The first one is MOA; second is core message; third is prep and administration; fourth is the ability to handle the anesthesia questions and conversations; and then obviously; the last one is compliance. After that, we schedule in-person training to the right-hand side, you'll see individuals come in and we facilitate a very didactic training. And one of the things that we do while we're there is we want to ensure that we arm them with the ability to leave this training and be able to have the confidence to go out with their customers and engage in conversations, not only just with the physicians, but also with the institutions. So we have a very robust training and has gone exceptionally well. So when looking at the implementation and how it continues to progress from a CrossLink standpoint, I can tell you that this is changing on a daily and weekly basis. Currently, Phase 1 was the CrossLink team. So we have trained 150 joint reps. And about a week ago, we finished training their trauma team. So the joint team has been live since April 1 and I would say the trauma team is live as of potentially last week. So that was Phase 1. While we completed Phase 1, our co leads were also helping us move into Phase II which is adding regional distributors, which are in green. We had 11 signed, we're up to 16 contracts regionally signed. It's over 200 reps in the states of Michigan, Kansas, City of St. Louis, Dallas and Houston. We've actually trained those [ metal ] reps live and they're actually actively engaging customers today. And then Phase II, which is the yellow, we're starting to schedule those trainings as we're moving forward. I think we're already booked out into the June time frame. And then finally, our goal by the end of the year will be to have a regional distributor in all 50 states and have the bandwidth and coverage that CrossLink can provide us. Anything you want to say?

So my name is Thomas Fleetwood, and I represent CrossLink. This is our 46th year in business, and we're the largest private orthopedic distributor in the United States. We are super excited to partner with Heron and the team here, incredible opportunity. The training so far has gone amazing. We work with a lot of different companies and the Heron team and the training they've set up has literally gone off perfect. Our guys are literally just starting to hunt right now. We're just starting to get cranked up, and we're building out across the United States. So a lot more to come. The response so far has been fantastic. It was interesting, I hosted, we were doing our due diligence on the product. I hosted a meeting, a roundtable of what I would call 1 percenters, there's a group of surgeons that are super high volume and we were doing a roundtable on a number of topics, but one of them obviously was post-op pain control. And one of the questions I asked was, was anyone currently using ZYNRELEF? And the answer show of hands was zero. And my next question was, has anybody heard of ZYNRELEF? And no show hands. So I knew we had a winner and I knew that there was a huge opportunity here. The response, again, that we've seen has been fantastic and is just getting started.

So when we look at the early impact that CrossLink is having, I'm only using April's month and using the states of North Carolina, South Carolina, Georgia. So traditionally, we, as an acute care sales force, we're adding about 10 orthopedic surgeons across the country on a monthly basis. In one short month, the 150 reps have brought 20 new orthopedic surgeons that are using product today. When we look at the growth outside of the CrossLink representatives in North Carolina, South Carolina and Georgia, the territories, 41 of them grew by 3 units in the month of April. In the 6 territories that I have in those 3 states, they grew by 36 units, which is a 12-fold increase, and we were just scratching the surface. The other impact that they've had in a short period of time, we're talking 5 or 6 weeks, they've actually introduced us to 180 new unique interactions, whether it be surgeons, orthos, physician assistants, but we've had 180 unique interactions. We expect to have 80 additional users in the next 30 to 45 days. That would have taken us 8 months on our own if we could have gotten there. and we've hosted 80 programs and in services or clinical touches.

David, one thing. I think it's important that everybody here understands the difference between a pharma rep and a device rep. So the magic of the program is a pharma rep is most of the time on the outside looking in, trying to get an appointment, trying to meet with the physician, knocking on doors, trying to get a window to tell them about their product. And a device rep, in most cases or a lot of cases, has been working with a physician or institution for maybe 5, 10, 15, 20, 25, in some cases, 30 years. And so our guys live in the OR, they make their living behind the red line. They're there every day, that's what they do, they wake up and go to the hospital. And so the interaction, the relationships they have with their surgeon customers is a completely different animal than pharma sales. So when we looked at this opportunity, I think it's important you guys know from the viewpoint we looked at as Heron had 47 reps in the U.S., and we're going to put a ton of reps that live behind the red line on the street. Like I just put my team on the street this past month, and that 20, that was literally like it wasn't even a full month and we're just getting cranked up. So it's going to be really strong.

Yes. And to add to that, I think I'll give you 1 example without naming names, but in state of South Carolina, our representative who has probably got 25 years of experience in hospital sales, for 2.5 years, couldn't get in front of 3 physicians. In less than a week, not only did she get in front of that physician due to the partnership, those 3 physicians are using product today. That would never have happened.

Yes. And one other thing I'll add is physicians are incredibly passionate about the implants they use, he mentioned metal, but a lot of times it's metal and plastic. And they're very passionate about their procedure, what they've trained on and what they use. And a lot of times, it's very hard for someone to switch between implant manufacturers because they're just used to their technique. Post-op pain control is an issue everybody is dealing with. And I can tell you from the interactions I've had with a number of physicians, great friends of mine, this is a pretty easy switch and everybody is very excited about it.

So 2024 is going to be -- our focus is around orthopedics and getting CrossLink up to speed across the nation. We believe that we will more than double the amount of orthopedic surgeons that we have using today, and that is going to be the focus for 2024. What the partnership also lets us do as we move into 2025, it is going to free up our reps time to be able to go sell in other procedures and surgeries such as bariatrics, general surgeons. But in 2024, our focus will be around orthopedics, ensuring that CrossLink is up and running. And just to give you a little perspective, this is on average, but each orthopedic surgeon could be worth roughly $50,000 to the bottom line. So keys to success for APONVIE, we'll continue to fill the pipeline with P&T's by establishing the unmet clinical need and the cost of burden. As you heard before, we'll leverage the Cochrane meta-analysis, which says that aprepitant is the #1 agent for postoperative nausea and vomiting. And then we will make sure that we continue -- once it gets approved, we can't stop there, right? It's the in-servicing, it's the pull-through, it's the education and also providing that feedback loop that Dr. Robbins has been able to do and see at his institution. From the ZYNRELEF side, we will own and dominate the total joint market. We will capitalize on the new broad label as CrossLink will free our time up to focus on additional procedures. And then for the rest of the year, it's really ensuring that we do our part to help build out the partnership, be supportive and roll this out across the country to really see the fruits of its labor in the second half. We will own the perioperative space. That's one of our missions on the acute care side. And we remind our representatives that we do have the best 2 in class [indiscernible] punch and best 2 products in this space. So the future is extremely bright as I shared with you, and you've heard earlier that pain and postoperative nausea and vomiting are the 2 biggest concerns when it comes to procedures. As you've seen, APONVIE is growing steady. We'll continue to fill the pipeline with future P&Ts. The adoption is just continuing to grow month-over-month. CrossLink will help us grow across the country. We'll free up our time, the VAN will help shorten the preparation and bridge the gap to the future, which is the prefilled syringe. So with that, I think I'll pass it to Rob.

Thanks, David. So I'm going to pivot us now to our oncology portfolio and brands. Before I get started there, I think one of the things I really love about our portfolio is just how much the brands complement each other. You heard a lot so far this morning about PONV and pain. Well, what you're going to hear in this next section is about chemo-induced nausea and vomiting and how CINVANTI and SUSTOL play a key role in that treatment. So I think one of the important things with cancer care, I think everyone in this room in some way, shape or form has been affected, whether it's a family member or personally by cancer care. Chemotherapy continues to be the backbone of the treatment of cancer. Even though there's been a number of developments since chemotherapy continues to be the backbone. With chemotherapy, there are a number of side effects. And so one of the side effects, of course, is chemo-induced nausea and vomiting, patients fear that, they fear hair loss, infection, all of those various different things as they're going through treatment. But when you think about chemo-induced nausea and vomiting, without CINV being under control, patients really risk the dose reductions it affects their quality of life. And we really have 2 great brands that are complementary to each other that really help patients through that journey. So I want to take you through a few of the business highlights. I want to talk a little bit about what the market opportunity is, really what the consistency of the CINV brands and portfolio has been over time. And so first and foremost, CINV, it's a substantial and growing market. There are over 5 million moderate to highly-emetogenic chemotherapy cycles that require treatment annually. What's nice about our portfolio, SUSTOL and CINVANTI? They're established differentiated CINV products that are complementary to each other. So when you think about how this disease state is treated? You've got most of the time, it's a 5-HT3 and NK1, there are 3 or 4 drug regimens that patients are getting. So 5-HT3 and NK1, dexamethasone. Olanzapine is also used in that treatment. From a commercial perspective, CINVANTI continues to have a 27% share in the market despite fosaprepitant generic entering the market 4 years ago. So in September 2019, it entered the market. At that point in time, we had a 40% share. We saw a drop off the following year. But over the last really 4 years, we've consistently maintained a share of 27%. The sales performance is really driven by a focused commercial strategy and execution. We have a small team, a small footprint where we have 4 national account directors that are highly focused on the clinic segment. And then we have 8 national account directors on the hospital side, which spend about 25% of their time on CINVANTI. The portfolio has generated over $630 million since inception with our first commercial launch happening in the fourth quarter of 2016 with SUSTOL. And in 2023, we exited at $107.9 million for the portfolio. It's a highly profitable franchise. As I mentioned, small commercial footprint. And then we have a robust IP Estate with patent protection through 2035 for CINVANTI. So this slide is a little bit of an eye chart, but I think there's some really key areas that I wanted to point out for you. So CINVANTI is an NK 1, it is polysorbate 80-free, and it's approved for both acute and delayed CINV due to both HEC and MEC.. And as mentioned earlier, that market has [ 500 million ] annual cycles. We launched in January of 2018, shortly after our launch in September 2019, fosaprepitant went generic. Some of the key differentiators with CINVANTI, first and foremost, it's free of synthetic surfactant polysorbate 80. Polysorbate 80, which is an Emend has been associated with infusion site reactions and hypersensitivity. That is a big differentiator for us in the market. Secondly is the operational efficiency of the product. So CINVANTI can either be given through an IV infusion or can be given via a 2-minute IV push. That 2-minute IV push is a big advantage for us. So the next slide here, I want to talk a little bit about the market. And so how we frame the market. So there are 4 products that we define as part of our market basket: one being CINVANTI. These are all IV NK1 products One is fosaprepitant. The other is IV Emend, which was a brand prior to fosaprepitant going generic. And then IV Akynzeo. IV Akynzeo is a combination product of a 5-HT3 and NK1 that we consider part of that market basket. What is really interesting about this space is the absolute growth that we've seen in the NK1 space. And so 2017, which I probably should have up here, 2017 was about 1.4 million units. And we continue to see growth. So if you look between 2018 and 2023, there was over 56% growth in the NK market. And then the recent 3 years was over 30%. If you look at this almost every other year, there's double-digit growth within the market. So it continues to grow. One key thing I want to point out here, right, CINVANTI is a aprepitant. APONVIE is a aprepitant. So it is the same compound. What's really interesting about this market, if you think about the growth that we're seeing in the NK1 market for CINV, what could that mean for the APONVIE market moving forward. All right. So I want to touch a little bit on performance. So we mentioned consistency; consistency, predictability of the brands. If you look at the last 5 quarters, we grew 4% versus the same time last year. So Q1 '24 versus Q1 '23. So we grew 4% in units. But our share, if you look at each quarter, has hovered between 27% and 28%. If I expanded that even further back in time to late 2020, that's around the kind of where we've been maintaining our share. The 170,000 units that we exited Q1 at is our highest unit number since before the generic entered the market in September of 2019. We look at our business also by 2 key segments: one, we look at the hospital segment; two, we look at the clinic segment. The clinic segment we defined it really is those physician-owned practices or community oncology. And so the hospital segment drove 112,000 units in the first quarter, predominantly, about 80% of that was driven by the 340B market. And then if you look at the clinic segment, kind of flat year-over-year, you see a little bit of fluctuation up and down based on buying patterns of clinics. But we exited the first quarter at 58,000 units and a 28% share within the clinic. So we really have consistent performance across segments and across the quarters. This slide, I'm going to spend a little bit of time on. And this is one I think is truly powerful. And the reason being is there are about 30 NCCN hospitals across the United States. This is a kind of very prestigious designation for these cancer centers. And if you look at the cancer centers up here on the list, at the top, we've got Memorial Sloan-Kettering. They have a 99% share of CINVANTI. They've been onboard with us since early 2018 when we launched the product. You've got other large cancer centers such as Duke. You also have Dana-Farber on the list and a number of others that I can mention. These are just the NCCN institutions. Outside of that, from coast to coast, we've got UPMC that is a large user of CINVANTI with an 80-plus percent share. University of California continues to grow quarter-over-quarter. So there are a number of significant key IDNs across the United States that are using this product. But really, one, we're an NCCN category 1 product and then also what really speaks to the IV push of the product, the operational efficiencies of the product is ASHP, the American Society of Health-System Pharmacists, recommend switching from an IV infusion to an IV push whenever possible. And they define that even more of anything that's under 5 minutes of infusion -- of a push time. And so this, again, as a reminder, CINVANTI is a 2-minute IV push. So last slide, I'm going to touch a little bit on SUSTOL. So SUSTOL is a 5-HT3. The 5-HT3 is the -- only subcutaneous 5-HT3 able to control and sustain therapeutic levels of granisetron greater than or equal to 5 days. What's nice about this is it also uses the proprietary Biochronomer technology similar to ZYNRELEF. And that's how we're able to maintain those therapeutic levels of granisetron over a 5-day period of time. The drug launched in October of 2016, almost immediately after March of 2018, we had palonosetron Aloxi and generic palonosetron. So we have been very comfortable competing in generic markets within the oncology space. One thing that you'll see on here is the patent expires in September of '24. However, the beauty of this proprietary biochronomer technology is we believe there is a very high bar for entry. And so we do not expect any competition within the space. And lastly, the market. The market is mostly made up of 5-HT3s of generics. So 98% of the volume is made up of generics or generic level priced products. When we define -- when we define this market, we're defining it really with 4 IV products. So one is Aloxi, which was a brand before it went generic. Palonosetron, which is the generic form. You've got SUSTOL and then IV Akynzeo, again, which is the combination product. Again, you're looking at a market that grew from $2.4 million in 2018 to over $3 million in 2023 and with 9.4% growth year-over-year. We did 33,000 units in 2023. We exited the first quarter at 10,000 units. So continue to move along and grow this business. So I think I'll leave you with a couple of things. Our products continue to have a differentiated value in the market, CINVANTI with the PS-80 formulation being key to our success as well as the 2-minute IV push, which gives operational efficiency and really cost savings to hospitals. These markets continue to grow year over year over year. And chemotherapy continues to be the backbone of oncology care, which there is a need for supportive care. And so with that, I'm going to close and transition to our Q&A.

Are there any questions?