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Heron’s newly-minted opioid alternative for post-surgical pain headed for blockbusterland, analysts say

May 14, 2021 Fraiser Kansteiner

The third time’s the charm for Heron Therapeutics, which unveiled an FDA approval for its opioid alternative for post-operative pain, Zynrelef, on Thursday. To the company’s chagrin, Zynrelef’s U.S. label is slimmer than anticipated. Still, analysts are already predicting the drug could spread its wings beyond its three initial indications—and eventually soar into blockbuster territory.

The FDA this week cleared Zynrelef to help patients manage pain for up to 72 hours after a bunionectomy, groin hernia repair or total knee replacement. The approval will allow Heron to target around 2.1 million procedures at launch, the company said in an approval presentation Thursday.

At a wholesale acquisition price of $267.50 for a 400 mg/12 mg vial and $135.50 for a 200 mg/6 mg vial, Zynrelef could be looking at a market worth some $300 million for those three procedures, analysts at Evercore ISI wrote in a note to clients this week.

Still, Heron was expecting a wider label. Following talks with the FDA, Heron said it “believed that the studies submitted in the Zynrelef [application] would be sufficient to obtain a broad indication.” Instead, a week before the FDA’s action date, the agency asked for more pharmacokinetic and safety data to support the drug’s use in other procedures.

The drug is already on the market in certain European countries, where it boasts a marketing authorization to treat somatic post-operative pain for small- to medium-sized surgical wounds in adults. In the U.S., the drug ran into two prior FDA setbacks.

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Heron’s drug could see use beyond the approved indications, though. On an approval call Thursday, Heron execs and clinicians suggested that there’s room for off-label use of Zynrelef as surgeons gain confidence in the drug. The Evercore team, for its part, described surgeons as “a unique type of specialist.” They “like to get their hands on new products, figure them out for themselves and use them based on their own experience and perception—not based on the label,” the analysts wrote.

As surgeons get acquainted with Zynrelef, the analysts predict its use will extend beyond the three indications on the label. What’s more, they expect the drug “to gradually emerge as a blockbuster therapy in the surgical setting.”

Jefferies analysts, meanwhile, took a more cautious stance. They predicted Zynrelef’s broader use would be in smaller surgeries, while in larger procedures, it would be used to complement Pacira Pharmaceuticals’ opioid alternative Exparel.

While Zynrelef “won’t be able to compete with Exparel in the all-important field of regional analgesia,” the Jefferies team wrote, they still see a “very large market opportunity” for both companies given the need for opioid alternatives for pain management.

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Heron is also banking on cost to give its drug an edge. The larger vial of Zynrelef is priced at a 22% wholesale acquisition cost discount to Exparel and a 41% discount at 340B hospitals, Heron said in its presentation. Given that the company is touting Zynrelef’s head-to-head superiority over solo bupivacaine, which Exparel hasn’t demonstrated, the Jefferies team wondered why Heron had priced its drug at such a steep discount.

Heron is eyeing a July launch for Zynrelef. To support those efforts, it says it’s signed on 89 new hospital sales reps. It’ll also rely on its previous experience with the launch of hospital antiemetic Cinvanti, which has snapped up a more than 40% share of units at hospitals in the two years since its debut, the Jefferies team noted.

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