0000950170-24-091764 | 10-Q | XBRL Viewer | Heron Therapeutics INC DE

Fair Value Measurements

6 Months Ended

Jun. 30, 2024

4. Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The FASB ASC Topic 820, Fair Value Measurements and Disclosures, establishes a fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:

•

Level 1—Observable inputs such as quoted prices in active markets for identical assets or liabilities.

•

Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

We measure cash, cash equivalents and short-term investments at fair value on a recurring basis. The fair values of such assets were as follows (in thousands):


			Fair Value Measurements at Reporting Date Using
	Balance at June 30, 2024		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and money market funds	$	14,210	$	14,210	$	—	$	—
U.S. Treasury bills and government agency obligations		31,634		31,634		—		—
U.S. corporate debt securities		11,202		—		11,202		—
Foreign corporate debt securities		10,301		—		10,301		—
Total	$	67,347	$	45,844	$	21,503	$	—


			Fair Value Measurements at Reporting Date Using
	Balance at December 31, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and money market funds	$	23,441	$	23,441	$	—	$	—
U.S. Treasury bills and government agency obligations		31,636		31,636		—		—
U.S. corporate debt securities		16,889		—		16,889		—
Foreign corporate debt securities		5,460		—		5,460		—
U.S. commercial paper		1,990		—		1,990		—
Foreign commercial paper		993		—		993		—
Total	$	80,409	$	55,077	$	25,332	$	—

We have not transferred any investment securities between the three levels of the fair value hierarchy for the three and six months ended June 30, 2024 or 2023.

As of June 30, 2024, cash equivalents included $4.2 million of available-for-sale securities with contractual maturities of three months or less and short-term investments included $19.1 million of available-for-sale securities with contractual maturities of three months to one year. As of December 31, 2023, cash equivalents included $5.3 million of available-for-sale securities with contractual maturities of three months or less and short-term investments included $51.7 million of available-for-sale securities with contractual maturities of three months to one year. The money market funds as of June 30, 2024 and December 31, 2023 are included in cash and cash equivalents on the condensed consolidated balance sheets.

A company may elect to use fair value to measure accounts receivable, available-for-sale securities, accounts payable, guarantees and issued debt, among others. If the use of fair value is elected, any upfront costs and fees related to the item such as debt issuance costs must be recognized in earnings and cannot be deferred. The fair value election is irrevocable and generally made on an instrument-by-instrument basis, even if a company has similar instruments that it elects not to measure based on fair value. Unrealized gains and losses on existing items for which fair value has been elected are reported as a cumulative adjustment to beginning retained earnings and any changes in fair value are recognized in earnings. We have elected to not apply the fair value option to our financial assets and liabilities.

Financial instruments, including cash, cash equivalents, receivables, inventory, prepaid expenses, other current assets, accounts payable and accrued expenses are carried at cost, which is considered to be representative of their respective fair values because of the short-term maturity of these instruments. Short-term available-for-sale investments are carried at fair value. Our notes payable and convertible notes payable outstanding at June 30, 2024 and December 31, 2023 do not have a readily available ascertainable market value; however, their carrying value, which is measured at carrying value less unamortized debt issuance costs and debt discounts, is considered to approximate their fair value.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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+ Details

Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Percentage of Product Sales and Accounts Receivable Balance

The following table includes the percentage of net product sales and accounts receivable balances for our three major Customers, each of which comprised 10% or more of our product sales:


	Net Product Sales						Accounts Receivable
	Three Months Ended June 30, 2024			Six Months Ended June 30, 2024			As of June 30, 2024
Customer A(1)		46.0	%		45.1	%		45.7	%
Customer B		34.6	%		36.2	%		35.1	%
Customer C		18.3	%		17.7	%		18.8	%
Total		98.9	%		99.0	%		99.6	%

(1)

Includes net product sales and accounts receivable balances for a subsidiary of Customer A that were reported separately in the Company’s Form 10-Q for the three months ended March 31, 2024, filed with the SEC on May 7, 2024.

Schedule of Disaggregated Net Product Sales

The following table provides disaggregated net product sales (in thousands):


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2024		2023		2024		2023
CINVANTI net product sales	$	24,927	$	24,474	$	50,544	$	47,329
SUSTOL net product sales		4,246		2,836		7,860		5,819
ZYNRELEF net product sales		5,831		4,128		10,844		7,661
APONVIE net product sales		1,020		324		1,446		568
Total net product sales	$	36,024	$	31,762	$	70,694	$	61,377

Summary of Activity to Product Returns, Distributor Fees and Discounts, Rebates and Administrative Fees

The following table provides a summary of activity with respect to our product returns, distributor fees and discounts, rebates and administrative fees, which are included in other accrued liabilities on the condensed consolidated balance sheets (in thousands):


	Product Returns			Distributor Fees			Discounts, Rebates and Administrative Fees			Total
Balance at December 31, 2023	$	4,776		$	4,419		$	27,334		$	36,529
Provision		(1,216	)		14,212			101,867			114,863
Payments/credits		(517	)		(12,969	)		(100,890	)		(114,376	)
Balance at June 30, 2024	$	3,043		$	5,662		$	28,311		$	37,016

Common Stock Equivalents Excluded From Computation of Net Loss Per Share

Because we have incurred a net loss for all periods presented in the unaudited condensed consolidated statements of operations and comprehensive loss, the following common stock equivalents were not included in the computation of net loss per share because their effect would be anti-dilutive (in thousands):


	June 30,
	2024		2023
Stock options outstanding		27,445		28,778
Restricted stock units outstanding		1,642		2,732
Warrants outstanding		298		8,548
Shares of common stock underlying convertible notes outstanding		9,819		9,819

Equity Incentive Plan - Summary of Fair Value of Option Grant on Grant Date and Employee Stock Purchase Plan Using Black-Scholes Option Pricing Model and Market Based Stock Option Grants Monte Carlo Simulation Model (Details)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Share-based Payment Arrangement, Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Risk-free interest rate	4.20%	3.60%
Dividend yield	0.00%	0.00%
Volatility	74.90%	67.40%
Share-based Payment Arrangement, Option \| Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected life	6 years	6 years
Share-based Payment Arrangement, Option \| Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected life	10 years	10 years
Employee Stock Purchase Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Risk-free interest rate	5.40%	5.10%
Dividend yield	0.00%	0.00%
Volatility	83.60%	97.10%
Expected life	6 months	6 months

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

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+ Details

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 18,386	$ 28,677
Short-term investments	48,961	51,732
Accounts receivable, net	73,708	60,137
Inventory	42,864	42,110
Prepaid expenses and other current assets	7,249	6,118
Total current assets	191,168	188,774
Property and equipment, net	15,900	20,166
Right-of-use lease assets	4,138	5,438
Other assets	6,930	8,128
Total assets	218,136	222,506
Current liabilities:
Accounts payable	10,226	3,240
Accrued clinical and manufacturing liabilities	17,554	22,291
Accrued payroll and employee liabilities	7,085	9,224
Other accrued liabilities	42,258	41,855
Current lease liabilities	3,194	3,075
Total current liabilities	80,317	79,685
Non-current lease liabilities	1,289	2,800
Non-current notes payable, net	24,634	24,263
Non-current convertible notes payable, net	149,595	149,490
Other non-current liabilities	241	241
Total liabilities	256,076	256,479
Stockholders' deficit:
Common stock	1,516	1,503
Additional paid-in capital	1,878,961	1,870,525
Accumulated other comprehensive (loss) income	(8)	13
Accumulated deficit	(1,918,409)	(1,906,014)
Total stockholders' deficit	(37,940)	(33,973)
Total liabilities and stockholders' deficit	$ 218,136	$ 222,506

Short-Term Investments (Tables)

6 Months Ended

Jun. 30, 2024

Short-Term Investments [Abstract]

Summary of Short-Term Investments

The following is a summary of our short-term investments (in thousands):


	June 30, 2024
			Gross		Gross
	Amortized		Unrealized		Unrealized			Estimated
	Cost		Gains		Losses			Fair Value
U.S. Treasury bills and government agency obligations	$	30,151	$	1	$	(3	)	$	30,149
U.S. corporate debt securities		8,513		—		(2	)		8,511
Foreign corporate debt securities		10,305		—		(4	)		10,301
Total	$	48,969	$	1	$	(9	)	$	48,961


	December 31, 2023
			Gross		Gross
	Amortized		Unrealized		Unrealized			Estimated
	Cost		Gains		Losses			Fair Value
U.S. Treasury bills and government agency obligations	$	31,625	$	11	$	—		$	31,636
U.S. corporate debt securities		11,652		1		—			11,653
Foreign corporate debt securities		5,459		1		—			5,460
U.S. commercial paper		1,991		—		(1	)		1,990
Foreign commercial paper		993		—		—			993
Total	$	51,720	$	13	$	(1	)	$	51,732

- Definition

Tabular disclosure of investment in debt security measured at fair value with change in fair value recognized in other comprehensive income (available-for-sale).

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+ Details

Short-Term Investments

6 Months Ended

Jun. 30, 2024

Short-Term Investments [Abstract]

Short-Term Investments

5. Short-Term Investments

The following is a summary of our short-term investments (in thousands):


	June 30, 2024
			Gross		Gross
	Amortized		Unrealized		Unrealized			Estimated
	Cost		Gains		Losses			Fair Value
U.S. Treasury bills and government agency obligations	$	30,151	$	1	$	(3	)	$	30,149
U.S. corporate debt securities		8,513		—		(2	)		8,511
Foreign corporate debt securities		10,305		—		(4	)		10,301
Total	$	48,969	$	1	$	(9	)	$	48,961


	December 31, 2023
			Gross		Gross
	Amortized		Unrealized		Unrealized			Estimated
	Cost		Gains		Losses			Fair Value
U.S. Treasury bills and government agency obligations	$	31,625	$	11	$	—		$	31,636
U.S. corporate debt securities		11,652		1		—			11,653
Foreign corporate debt securities		5,459		1		—			5,460
U.S. commercial paper		1,991		—		(1	)		1,990
Foreign commercial paper		993		—		—			993
Total	$	51,720	$	13	$	(1	)	$	51,732

The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. We regularly monitor and evaluate the realizable value of our marketable securities. We did not recognize any impairment losses during the three and six months ended June 30, 2024 and 2023.

Unrealized gains and losses associated with our investments are reported in accumulated other comprehensive income (loss). Realized gains and losses associated with our investments, if any, are reported in the statements of operations and comprehensive loss. We did not recognize any realized gains or losses during the three and six months ended June 30, 2024 and 2023.

Leases (Tables)

6 Months Ended

Jun. 30, 2024

Leases [Abstract]

Summary of Future Minimum Lease Payments

Annual future minimum lease payments as of June 30, 2024 are as follows (in thousands):


2024	$	1,578
2025		3,138
Total future minimum lease payments	$	4,716
Less: discount		(233	)
Total lease liabilities	$	4,483

Basis of Presentation	6 Months Ended
Basis of Presentation	Jun. 30, 2024
Accounting Policies [Abstract]
Basis of Presentation	2. Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the requirements of the SEC for interim reporting. Accordingly, since they are interim statements, they do not include all of the information and disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for other quarters or the year ending December 31, 2024. The condensed consolidated balance sheet as of December 31, 2023 has been derived from the audited financial statements as of that date. For more complete financial information, these condensed consolidated financial statements and the notes thereto should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on March 12, 2024. Reclassification of Certain Expenses The condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2023 reflect reclassification of certain expenses from research and development to general and administrative expenses to align with the Company's presentation for the three and six months ended June 30, 2024 as a result of the restructuring implemented in 2023 and the realignment of the Company's departments. This presentation results in no change to total operating expenses, loss from operations or net loss and no pro forma financial information is necessary.

Leases

6 Months Ended

Jun. 30, 2024

Leases [Abstract]

Leases

7. Leases

As of June 30, 2024, we had an operating lease for 52,148 square feet of laboratory and office space in San Diego, California, with a lease term that expires on December 31, 2025. In October 2021, we entered into a sublease agreement to sublet 23,873 square feet of laboratory and office space. The space was delivered to the subtenant in March 2022. As a result of the sublease agreement, our one five-year option to renew this lease on expiration applies only with respect to our remaining 28,275 square feet of laboratory and office space.

We also have an operating lease through which we sublease 5,840 square feet of office space in Cary, North Carolina, with a lease term that expires on April 30, 2025.

During the three and six months ended June 30, 2024, we recognized $0.7 million and $1.5 million of operating lease expense, respectively. During the three and six months ended June 30, 2024, we paid $0.8 million and $1.6 million, respectively, for our operating leases.

During the three and six months ended June 30, 2023, we recognized $0.7 million and $1.4 million of operating lease expense, respectively. During the three and six months ended June 30, 2023, we paid $1.0 million and $1.7 million, respectively, for our operating leases.

Annual future minimum lease payments as of June 30, 2024 are as follows (in thousands):


2024	$	1,578
2025		3,138
Total future minimum lease payments	$	4,716
Less: discount		(233	)
Total lease liabilities	$	4,483

Stockholders' Equity

6 Months Ended

Jun. 30, 2024

Equity [Abstract]

Stockholders' Equity

9. Stockholders’ Deficit

2023 Private Placement

On July 21, 2023, we entered into a Securities Purchase Agreement (the “July 2023 Private Placement”) with Rubric Capital Management L.P., Velan Capital, Clearline Capital and Hercules Capital, Inc. (collectively, the “Purchasers”) whereby we sold 20.7 million shares of our common stock in a private placement at a purchase price of $1.37 per share. In addition, as a component of the July 2023 Private Placement, we sold 1.2 million pre-funded warrants to purchase shares of our common stock at a purchase price of $1.3699 per share (the "July 2023 Pre-Funded Warrants"). The July 2023 Pre-Funded Warrants have an exercise price of $0.0001 per share. The total net proceeds from the sale of the common stock and the July 2023 Pre-Funded Warrants was $29.8 million (net of $0.2 million in issuance costs). The July 2023 Private Placement closed on July 25, 2023. In August 2023, we filed a registration statement with the SEC to register for resale 21.9 million shares of our common stock. The registration statement was declared effective on August 31, 2023.

- Definition

The entire disclosure for equity.

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+ Details

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2024	Aug. 01, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2024
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Trading Symbol	HRTX
Entity Registrant Name	HERON THERAPEUTICS, INC. /DE/
Entity Central Index Key	0000818033
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		151,668,017
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity File Number	001-33221
Entity Tax Identification Number	94-2875566
Entity Address, Address Line One	4242 Campus Point Court
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	San Diego
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92121
City Area Code	858
Local Phone Number	251-4400
Entity Interactive Data Current	Yes
Entity Incorporation, State or Country Code	DE
Document Quarterly Report	true
Document Transition Report	false
Title of 12(b) Security	Common Stock, par value $0.01 per share
Security Exchange Name	NASDAQ

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Operating activities:
Net loss	$ (12,395)	$ (74,827)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense	7,945	21,847
Depreciation and amortization	1,330	1,457
Amortization of debt discount	180	103
Amortization of debt issuance costs	104
Accretion of discount on short-term investments	(1,211)	(835)
Impairment of property and equipment	3,441	309
Loss on disposal of property and equipment		23
Change in operating assets and liabilities:
Accounts receivable	(13,571)	(24,644)
Inventory	(754)	9,950
Prepaid expenses and other assets	67	10,369
Accounts payable	6,986	(1,268)
Accrued clinical and manufacturing liabilities	(4,605)	(4,587)
Accrued payroll and employee liabilities	(2,139)	(3,560)
Other accrued and other non-current liabilities	502	13,598
Net cash used in operating activities	(14,120)	(52,065)
Investing activities:
Purchases of short-term investments	(65,100)	(28,381)
Maturities and sales of short-term investments	69,063	78,935
Purchases of property and equipment	(637)	(502)
Net cash provided by investing activities	3,326	50,052
Financing activities:
Receipts (Payments) for stock issued under the equity incentive plan	328	(593)
Proceeds from purchases under the employee stock purchase plan	175	704
Net cash provided by financing activities	503	111
Net decrease increase in cash and cash equivalents	(10,291)	(1,902)
Cash and cash equivalents at beginning of year	28,677	15,364
Cash and cash equivalents at end of period	18,386	13,462
Supplemental disclosure of cash flow information:
Interest paid	$ 2,426	$ 1,125

Accounting Policies - Additional Information (Details) - USD ($)	3 Months Ended
	Jun. 30, 2024	Mar. 31, 2024
Product Information [Line Items]
Allowance for credit losses	$ 0
Property, Plant, and Equipment, Useful Life, Term, Description [Extensible Enumeration]	us-gaap:UsefulLifeTermOfLeaseMember
Write-off of property and equipment incurred loss	$ 3,100,000
Gain contingency settlement of legal dispute		$ 2,500,000
Accounting Standards Update 2020-06
Product Information [Line Items]
Change in accounting principle, accounting standards update, immaterial effect	true

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

We measure cash, cash equivalents and short-term investments at fair value on a recurring basis. The fair values of such assets were as follows (in thousands):


			Fair Value Measurements at Reporting Date Using
	Balance at June 30, 2024		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and money market funds	$	14,210	$	14,210	$	—	$	—
U.S. Treasury bills and government agency obligations		31,634		31,634		—		—
U.S. corporate debt securities		11,202		—		11,202		—
Foreign corporate debt securities		10,301		—		10,301		—
Total	$	67,347	$	45,844	$	21,503	$	—


			Fair Value Measurements at Reporting Date Using
	Balance at December 31, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and money market funds	$	23,441	$	23,441	$	—	$	—
U.S. Treasury bills and government agency obligations		31,636		31,636		—		—
U.S. corporate debt securities		16,889		—		16,889		—
Foreign corporate debt securities		5,460		—		5,460		—
U.S. commercial paper		1,990		—		1,990		—
Foreign commercial paper		993		—		993		—
Total	$	80,409	$	55,077	$	25,332	$	—

Fair Value Measurements - Schedule of Financial Assets Measured on a Recurring Basis (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities	$ 48,961	$ 51,732
U.S. Treasury Bills and Government Agency Obligations
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities	30,149	31,636
U.S. Corporate Debt
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities	8,511	11,653
Foreign Corporate Debt
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities	10,301	5,460
U.S. Commercial Paper
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities		1,990
Fair Value, Recurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total	67,347	80,409
Fair Value, Recurring \| Foreign Commercial Paper
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities		993
Fair Value, Recurring \| U.S. Treasury Bills and Government Agency Obligations
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities	31,634	31,636
Fair Value, Recurring \| U.S. Corporate Debt
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities	11,202	16,889
Fair Value, Recurring \| Foreign Corporate Debt
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities	10,301	5,460
Fair Value, Recurring \| U.S. Commercial Paper
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities		1,990
Fair Value, Recurring \| Cash and Money Market Funds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash and money market funds	14,210	23,441
Fair Value, Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total	45,844	55,077
Fair Value, Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1) \| U.S. Treasury Bills and Government Agency Obligations
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities	31,634	31,636
Fair Value, Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1) \| Cash and Money Market Funds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash and money market funds	14,210,000	23,441
Fair Value, Recurring \| Significant Other Observable Inputs (Level 2)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total	21,503	25,332
Fair Value, Recurring \| Significant Other Observable Inputs (Level 2) \| Foreign Commercial Paper
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities		993
Fair Value, Recurring \| Significant Other Observable Inputs (Level 2) \| U.S. Corporate Debt
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities	11,202	16,889
Fair Value, Recurring \| Significant Other Observable Inputs (Level 2) \| Foreign Corporate Debt
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities	$ 10,301	5,460
Fair Value, Recurring \| Significant Other Observable Inputs (Level 2) \| U.S. Commercial Paper
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities		$ 1,990

Accounting Policies - Summary of Disaggregated Net Product Sales (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Product Information [Line Items]
Net product sales	$ 36,024	$ 31,762	$ 70,694	$ 61,377
CINVANTI
Product Information [Line Items]
Net product sales	24,927	24,474	50,544	47,329
SUSTOL
Product Information [Line Items]
Net product sales	4,246	2,836	7,860	5,819
ZYNRELEF
Product Information [Line Items]
Net product sales	5,831	4,128	10,844	7,661
APONVIE
Product Information [Line Items]
Net product sales	$ 1,020	$ 324	$ 1,446	$ 568

- Definition

Amount, including tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value-added and excise.

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Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147482810/280-10-50-32

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 924
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479941/924-10-S99-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-5

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 30
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-30

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 42
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-42

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-22

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 40
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-40

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-22

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 4
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-4

+ Details

Leases - Summary of Future Minimum Lease Payments (Details) $ in Thousands	Jun. 30, 2024 USD ($)
Leases [Abstract]
2024	$ 1,578
2025	3,138
Total future minimum lease payments	4,716
Less: discount	(233)
Total lease liabilities	$ 4,483

Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	Aug. 31, 2023	Jul. 21, 2023
Class Of Stock [Line Items]
Common shares registered for resale	21.9
Pre-funded Warrants
Class Of Stock [Line Items]
Purchase price per share		$ 1.3699
Class of warrant or right, number of securities called by warrants or rights		1.2
Class of warrant or right, exercise price of warrants or rights		$ 0.0001
2023 Private Placement
Class Of Stock [Line Items]
Shares of common stock sold		20.7
Purchase price per share		$ 1.37
Proceeds from issuance of common stock and pre-funded warrants		$ 29.8
Stock issuance cost		$ 0.2

Short-term Investments - Summary of Short-term Investments (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Schedule Of Available For Sale Securities [Line Items]
Available-for-sale securities, amortized cost	$ 48,969	$ 51,720
Available-for-sale securities, gross unrealized gains	1	13
Available-for-sale securities, gross unrealized losses	(9)	(1)
Available-for-sale securities	48,961	51,732
U.S. Treasury Bills and Government Agency Obligations
Schedule Of Available For Sale Securities [Line Items]
Available-for-sale securities, amortized cost	30,151	31,625
Available-for-sale securities, gross unrealized gains	1	11
Available-for-sale securities, gross unrealized losses	(3)
Available-for-sale securities	30,149	31,636
U.S. Corporate Debt
Schedule Of Available For Sale Securities [Line Items]
Available-for-sale securities, amortized cost	8,513	11,652
Available-for-sale securities, gross unrealized gains		1
Available-for-sale securities, gross unrealized losses	(2)
Available-for-sale securities	8,511	11,653
Foreign Corporate Debt
Schedule Of Available For Sale Securities [Line Items]
Available-for-sale securities, amortized cost	10,305	5,459
Available-for-sale securities, gross unrealized gains	0	1
Available-for-sale securities, gross unrealized losses	(4)
Available-for-sale securities	$ 10,301	5,460
U.S. Commercial Paper
Schedule Of Available For Sale Securities [Line Items]
Available-for-sale securities, amortized cost		1,991
Available-for-sale securities, gross unrealized losses		(1)
Available-for-sale securities		1,990
Foreign Commercial Paper
Schedule Of Available For Sale Securities [Line Items]
Available-for-sale securities, amortized cost		993
Available-for-sale securities		$ 993

Income Taxes

6 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

11. Income Taxes

Deferred income tax assets and liabilities are recognized for temporary differences between financial statements and income tax carrying values using tax rates in effect for the years such differences are expected to reverse. Due to uncertainties surrounding our ability to generate future taxable income and consequently realize such deferred income tax assets, a full valuation allowance has been established. We continue to maintain a full valuation allowance against our deferred tax assets as of June 30, 2024.

The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more likely than not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will be recognized when it is more likely than not of being sustained. The disclosures regarding uncertain tax positions included in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on March 12, 2024, continue to be accurate for the three and six months ended June 30, 2024.

- Definition

The entire disclosure for income tax.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 231
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482663/740-10-55-231

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12C
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12B
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477891/740-270-50-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479360/740-10-S99-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480990/946-20-50-13

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/740/tableOfContent

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-14

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-21

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-17

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482603/740-30-50-2

+ Details

Equity Incentive Plan (Tables)

6 Months Ended

Jun. 30, 2024

Equity [Abstract]

Summary of Stock Option Activity

The following table summarizes the stock option activity for the six months ended June 30, 2024:


	Shares (in thousands)			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)
Outstanding at December 31, 2023		24,575		$	7.06		5.60
Granted		6,826		$	2.23
Exercised		(372	)	$	2.46
Expired and forfeited		(3,584	)	$	11.17
Outstanding at June 30, 2024		27,445		$	5.38		7.74

Summary of Fair Value of Option Grant on Grant Date and Employee Stock Purchase Plan Using Black-Scholes Option Pricing Model and Market Based Stock Option Grants Monte Carlo Simulation Model

We estimated the fair value of each option grant on the grant date using the Black-Scholes option pricing model and for market-based stock option grants using the Monte Carlo simulation model. The following are the weighted-average assumptions:


	For the Six Months Ended
	June 30,
	2024			2023
Risk-free interest rate		4.2	%		3.6	%
Dividend yield		0.0	%		0.0	%
Volatility		74.9	%		67.4	%
Expected life (years)	6 to 10			6 to 10

We estimated the fair value of each purchase right granted under our 1997 Employee Stock Purchase Plan, as amended, at the beginning of each new offering period using the Black-Scholes option pricing model. The following are the weighted average assumptions:


	For the Six Months Ended
	June 30,
	2024			2023
Risk-free interest rate		5.4	%		5.1	%
Dividend yield		0.0	%		0.0	%
Volatility		83.6	%		97.1	%
Expected life (months)		6			6

Summary of Restricted Stock Unit Activity

The following table summarizes the restricted stock unit activity (“RSUs”) for the six months ended June 30, 2024:


	Shares (in thousands)			Weighted-Average Grant Date Fair Value
Outstanding at December 31, 2023		1,405		$	4.43
Granted		1,482		$	2.30
Released		(829	)	$	2.63
Expired and forfeited		(415	)	$	3.67
Outstanding at June 30, 2024		1,642		$	2.97

The fair value of RSUs is estimated based on the closing market price of our common stock on the date of the grant. RSUs generally vest quarterly over a four-year period.

Summary of Stock-Based Compensation Expense related to Stock-Based Payment Awards Granted

The following table summarizes stock-based compensation expense related to stock-based payment awards granted pursuant to all of our equity compensation arrangements (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Research and development	$	553	$	2,694	$	1,254	$	4,430
General and administrative		2,060		6,925		3,938		10,457
Sales and marketing		1,957		4,281		2,753		6,960
Total stock-based compensation expense	$	4,570	$	13,900	$	7,945	$	21,847

Equity Incentive Plan - Summary of Stock-Based Compensation Expense related to Stock-Based Payment Awards Granted (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 4,570	$ 13,900	$ 7,945	$ 21,847
Research and Development Expense
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	553	2,694	1,254	4,430
General and Administrative Expense
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	2,060	6,925	3,938	10,457
Sales and Marketing Expense
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 1,957	$ 4,281	$ 2,753	$ 6,960

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

Business - Additional Information (Details) $ in Millions	Jun. 30, 2024 USD ($)
Business [Line Items]
Cash, cash equivalents and short-term investments	$ 67.3

Long-Term Debt and Convertible Notes - Additional Information (Details) - USD ($)			1 Months Ended	3 Months Ended		6 Months Ended
	Aug. 15, 2023	Aug. 09, 2023	May 31, 2021	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Debt Instrument [Line Items]
Amortization of debt issuance costs						$ 104,000
Debt instrument convertible type of equity security		The Loan Agreement has a term of four years, with a springing maturity date that is 91 days prior to the stated maturity of our Notes (as defined below) (if still outstanding at such time).
Loan agreement, term		4 years
Loan agreement spring maturity date		91 days
Debt instrument, interest rate	9.95%
Accrued paid-in-kind interest	$ 1.5
Amortization of debt discount						180,000	$ 103,000
Other Accrued Liabilities
Debt Instrument [Line Items]
Term fee accreted				$ 200,000		200,000
Common Stock
Debt Instrument [Line Items]
Initial conversion price/rate			$ 15.276
Tranche 1A \| Warrant
Debt Instrument [Line Items]
Percentage of principal amount of loan funded to lender		2.00%
Hercules Capital Inc
Debt Instrument [Line Items]
Convertible debt issuable in connection with private placement	50,000,000
Debt issuance costs incurred		$ 600,000
Effective interest rate		14.50%
Interest expense				900,000		1,800,000
Interest expense, debt, excluding amortization				700,000		1,300,000
Paid-in-kind interest amount				100,000		200,000
Amortization of debt discount		$ 800,000		200,000		300,000
Common stock exercise price, per share		$ 1.68
Minimum cash covenant amount, requiring to hold cash		$ 8,500,000
Maximum amount of market capitalization		400,000,000
Warrants related fair value recongnized amount		400,000
Debt instrument, face amount		$ 25,000,000
Hercules Capital Inc \| Maximum \| Common Stock
Debt Instrument [Line Items]
Number of shares warrant issued to lender		297,619
Hercules Capital Inc \| Tranche 1A
Debt Instrument [Line Items]
Convertible debt issuable in connection with private placement	25,000,000
Paid-in-kind interest amount						300,000
Carrying value of debt				24,600,000		24,600,000
Debt instrument, face amount		$ 25,000,000		25,000,000		25,000,000
Debt issuance costs				700,000		700,000
Hercules Capital Inc \| Tranche 1B
Debt Instrument [Line Items]
Convertible debt issuable in connection with private placement	5,000,000
Hercules Capital Inc \| Tranche 1C
Debt Instrument [Line Items]
Convertible debt issuable in connection with private placement	$ 20,000,000
Notes
Debt Instrument [Line Items]
Amortization of debt issuance costs				$ 100,000	$ 51,000	100,000	100,000
Debt instrument, interest rate			1.50%
Convertible debt issuable in connection with private placement			$ 150,000,000.0
Debt issuance costs incurred						$ 1,000,000
Effective interest rate				1.60%		1.60%
Interest expense				$ 500,000	600,000	$ 1,100,000	1,200,000
Interest expense, debt, excluding amortization				400,000	$ 600,000	1,000,000	$ 1,100,000
Net proceeds from convertible notes financing			$ 149,000,000.0
Debt instrument, maturity date			May 26, 2026
Debt instrument, frequency of periodic payment			semi-annually
Debt instrument, date of first required payment			Dec. 15, 2021
Initial conversion price/rate			$ 65.462
Debt instrument conversion ratio multiple of principal			$ 1,000
Common shares registered for resale in connection with convertible notes			12,400,000
Carrying value of debt				149,600,000		149,600,000
Debt instrument, face amount				150,000,000.0		150,000,000.0
Debt issuance costs				$ 400,000		$ 400,000
Notes \| Redemption Between May 24, 2024 and May 24, 2025
Debt Instrument [Line Items]
Debt instrument, redemption period, stock price exceeds in percentage of conversion price			250.00%
Notes \| Redemption On or After May 24, 2025
Debt Instrument [Line Items]
Debt instrument, redemption period, stock price exceeds in percentage of conversion price			200.00%

Long-Term Debt and Convertible Notes

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Long-Term Debt and Convertible Notes

8. Long-Term Debt and Convertible Notes

Working Capital Facility Agreement

On August 9, 2023, we entered into a working capital facility agreement (the “Loan Agreement”) with Hercules Capital, Inc., as administrative agent and collateral agent, and the lenders party thereto (the “Lenders”). The Loan Agreement provides an aggregate principal amount of up to $50.0 million with tranched availability as follows: $25.0 million at closing (“tranche 1A”), $5.0 million available through December 15, 2024 (“tranche 1B”), and $20.0 million available from the earlier of: (1) the full draw of tranche 1B and (2) the expiration of tranche 1B, and available through December 15, 2025 (“tranche 1C”), and in the case of tranches 1B and 1C, subject to certain customary conditions to draw down.

The Loan Agreement has a term of four years, with a springing maturity date that is 91 days prior to the stated maturity of our Notes (as defined below) (if still outstanding at such time). The loans thereunder do not have any scheduled amortization payments and accrue interest at a floating rate equal to, 9.95% per annum, payable in cash on a monthly basis and upon maturity or payoff. In addition, under the terms of the Loan Agreement, the loans also accrue paid-in-kind interest at a fixed-rate of 1.5% per annum which is due upon maturity or payoff.

In addition, in connection with the tranche 1A funding, we issued warrants to the Lenders to purchase up to 297,619 shares of our common stock at an exercise price of $1.68 per share (the "Lender Warrants"). The Lender Warrants are equal to 2.00% of the principal amount of tranche 1A loans funded by the Lenders (the “Warrant Coverage”). The Loan Agreement also requires that we issue additional warrants to the Lenders at the time of each draw down of tranches 1B and 1C with the same Warrant Coverage. Each Lender Warrant is exercisable for seven years from the date of issuance.

The Loan Agreement contains a minimum cash covenant, beginning on the closing date, requiring us to hold cash of no less than $8.5 million, if our market capitalization is less than $400.0 million. The Loan Agreement also contains customary representations and warranties and customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness, and dividends and other distributions, subject to certain exceptions. We were in compliance with all covenants of the Loan Agreement as of June 30, 2024.

The Loan Agreement was accounted for in accordance with ASC Topic 470, Debt, ASC Topic 480, Distinguishing Liabilities from Equity, and ASC Topic 815, Derivatives and Hedging. The initial tranche 1A funding of $25.0 million and the Lender Warrants are accounted for as freestanding debt and equity financial instruments, respectively, as they are legally detachable and separately exercisable. The additional borrowings available under the Loan Agreement plus the additional warrants to purchase shares of our common stock, which would be issued concurrently, are accounted for as a single freestanding financial instrument that are not assets or obligations of ours; this financial instrument meets the loan commitment derivative scope exception and will be accounted for when and if we borrow additional tranches in the future. The initial funding of $25.0 million was recorded as a liability on the condensed consolidated balance sheets.

In connection with the Loan Agreement, we recognized the initial Lender Warrants at their relative fair value of $0.4 million, and we incurred debt issuance costs of $0.6 million, both of which were recorded as debt discounts. The debt discounts and the end of term fee, of $0.8 million, are being amortized and accreted into interest expense using the effective interest rate method over the term of the Loan Agreement, resulting in an effective interest rate of 14.5%. For the three and six months ended June 30, 2024, interest expense related to the Loan Agreement was $0.9 million and $1.8 million, respectively, which included $0.7 million and $1.3 million, respectively, related to the stated interest rate, $0.1 million and $0.2 million, respectively, related to paid-in-kind interest, and $0.2 million and $0.3 million, respectively, related to the amortization of the debt discounts. As of June 30, 2024, the carrying value of tranche 1A was $24.6 million, which is comprised of the $25.0 million principal amount outstanding, $0.3 million of accumulated paid-in-kind interest, less debt discounts of $0.7 million. The end of term fee accreted as of June 30, 2024 of $0.2 million is recorded in other accrued liabilities on the condensed consolidated balance sheets.

Senior Unsecured Convertible Notes

In May 2021, we entered into a note purchase agreement with funds affiliated with Baker Bros. Advisors LP for a private placement of $150.0 million in Senior Unsecured Convertible Notes (the “Notes”). We received a total of $149.0 million, net of issuance costs, from the issuance of the Notes.

The Notes were issued at par. The Notes bear interest at a rate of 1.5% per annum, payable in cash semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2021. The Notes mature on May 26, 2026, unless earlier converted, redeemed or repurchased.

The Notes are subject to redemption at our option, between May 24, 2024 and May 24, 2025, but only if the last reported sale price per share of our common stock exceeds 250% of the conversion price for a specified period of time, or will be subject to redemption at our option on or after May 24, 2025 if the last reported sale price per share of our common stock exceeds 200% of the conversion price for a specified period of time. The redemption price will be equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest.

Upon conversion, we will settle the Notes in shares of our common stock. The initial conversion rate for the Notes is 65.4620 shares per $1,000 principal amount of the Notes (equivalent to an initial conversion price of $15.276 per share of common stock).

If a holder of the Notes converts upon a make-whole fundamental change or company redemption, the holder may be eligible to receive a make-whole premium through an increase to the conversion rate.

In May 2021, we filed a registration statement with the SEC to register for resale 12.4 million shares of our common stock underlying the Notes, including the maximum number of shares of common stock issuable under the make-whole premium.

The Notes were accounted for in accordance with ASC Subtopic 470-20, Debt with Conversion and Other Options (“ASC 470-20”), and ASC Subtopic 815-40, Contracts in Entity’s Own Equity (“ASC 815-40”). Under ASC 815-40, to qualify for equity classification (or non-bifurcation, if embedded), the instrument (or embedded feature) must be both (1) indexed to the issuer’s stock and (2) meet the requirements of the equity classification guidance. Based upon our analysis, it was determined that the Notes do contain embedded features indexed to our common stock, but do not meet the requirements for bifurcation, and therefore do not need to be separately accounted for as an equity component. Since the embedded conversion feature meets the equity scope exception from derivative accounting, and, also since the embedded conversion option does not need to be separately accounted for as an equity component under ASC 470-20, the proceeds received from the issuance of the Notes were recorded as a liability on the condensed consolidated balance sheets.

We incurred issuance costs related to the Notes of $1.0 million, which we recorded as debt issuance costs and are included as a reduction to the Notes on the condensed consolidated balance sheets. The debt issuance costs are being amortized to interest expense using the effective interest rate method over the term of the Notes, resulting in an effective interest rate of 1.6%. For the three and six months ended June 30, 2024, interest expense related to the Notes was $0.5 million and $1.1 million, respectively, which included $0.4 million and $1.0 million, respectively, related to the stated interest rate and $0.1 million and $0.1 million, respectively, related to the amortization of debt issuance costs. For the three and six months ended June 30, 2023, interest expense related to the Notes was $0.6 million and $1.2 million, respectively, which included $0.6 million and $1.1 million, respectively, related to the stated interest rate and $51,000 and $0.1 million, respectively, related to the amortization of debt issuance costs. As of June 30, 2024, the carrying value of the Notes was $149.6 million, which is comprised of the $150.0 million principal amount of the Notes outstanding, less debt issuance costs of $0.4 million.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481544/470-10-50-6

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481544/470-10-50-6

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
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+ Details

Leases - Additional Information (Details) $ in Millions	3 Months Ended		6 Months Ended
Leases - Additional Information (Details) $ in Millions	Jun. 30, 2024 USD ($) ft²	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($) ft²	Jun. 30, 2023 USD ($)	Oct. 31, 2021 ft²
Sublease Agreement
Lessee Lease Description [Line Items]
Area of real estate property \| ft²					23,873
San Diego, California
Lessee Lease Description [Line Items]
Area of real estate property \| ft²	52,148		52,148
Lease expiration date			Dec. 31, 2025
Remaining area of real estate property \| ft²	28,275		28,275		28,275
Lessee, operating lease, existence of option to extend			true
Operating lease expense \| $	$ 0.7	$ 0.7	$ 1.5	$ 1.4
Operating lease cash payments \| $	0.8	$ 1.0	1.6	$ 1.7
Cary, North Carolina
Lessee Lease Description [Line Items]
Operating lease expense \| $	0.7		1.5
Operating lease cash payments \| $	$ 0.8		$ 1.6
Cary, North Carolina \| Sublease Agreement
Lessee Lease Description [Line Items]
Area of real estate property \| ft²	5,840		5,840
Lease expiration date			Apr. 30, 2025

Inventory - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Mar. 31, 2024	Dec. 31, 2023
Inventory [Line Items]
Total inventory	$ 42,864		$ 42,864			$ 42,110
Cost of product sales, charges	1,600	$ 7,500	1,600	$ 12,800
CINVANTI
Inventory [Line Items]
Total inventory	28,900		28,900			26,400
ZYNRELEF
Inventory [Line Items]
Total inventory	11,000		11,000			11,200
SUSTOL
Inventory [Line Items]
Total inventory	$ 2,900		$ 2,900			4,100
APONVIE
Inventory [Line Items]
Total inventory					$ 100	$ 400

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Revenues:
Net product sales	$ 36,024	$ 31,762	$ 70,694	$ 61,377
Cost of product sales	10,518	20,158	18,962	37,012
Gross Profit	25,506	11,604	51,732	24,365
Operating expenses:
Research and development	4,432	13,210	9,040	22,046
General and administrative	13,905	19,592	28,879	35,426
Sales and marketing	13,614	21,205	25,056	42,359
Total operating expenses	31,951	54,007	62,975	99,831
Loss from operations	(6,445)	(42,403)	(11,243)	(75,466)
Other (expense) income, net	(2,790)	344	(1,152)	639
Net loss	(9,235)	(42,059)	(12,395)	(74,827)
Other comprehensive loss:
Unrealized (losses) gains on short-term investments	(2)	(15)	(21)	13
Comprehensive loss	$ (9,237)	$ (42,074)	$ (12,416)	$ (74,814)
Basic net loss per common share	$ (0.06)	$ (0.35)	$ (0.08)	$ (0.63)
Weighted average common shares outstanding, basic	152,305	119,719	151,900	119,484
Diluted net loss per common share	$ (0.06)	$ (0.35)	$ (0.08)	$ (0.63)
Weighted average common shares outstanding, diluted	152,305	119,719	151,900	119,484

Business

6 Months Ended

Jun. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business

1. Business

We are a commercial-stage biotechnology company focused on improving the lives of patients by developing and commercializing therapeutic innovations that improve medical care. Our advanced science, patented technologies, and innovative approach to drug discovery and development have allowed us to create and commercialize a portfolio of products that aim to advance the standard of care for acute care and oncology patients.

ZYNRELEF (bupivacaine and meloxicam) extended-release solution (“ZYNRELEF”) is approved in the United States (“U.S.”) for the management of postoperative pain. APONVIE (aprepitant) injectable emulsion (“APONVIE”) is approved in the U.S. for the prevention of postoperative nausea and vomiting. CINVANTI (aprepitant) injectable emulsion (“CINVANTI”) and SUSTOL (granisetron) extended-release injection (“SUSTOL”) are both approved in the U.S. for the prevention of chemotherapy-induced nausea and vomiting.

As of June 30, 2024, we had cash, cash equivalents and short-term investments of $67.3 million. Based on our current operating plan and projections, management believes that the Company's cash, cash equivalents and short-term investments will be sufficient to meet the Company's anticipated cash requirements for a period of at least one year from the date this Quarterly Report on Form 10-Q is filed with the U.S. Securities and Exchange Commission (“SEC”).

Inventory

6 Months Ended

Jun. 30, 2024

Inventory Disclosure [Abstract]

Inventory

6. Inventory

Inventory consists of the following (in thousands):


	June 30, 2024		December 31, 2023
Raw materials	$	19,594	$	17,643
Work in process		16,051		14,550
Finished goods		7,219		9,917
Total inventory	$	42,864	$	42,110

As of June 30, 2024, total inventory included $28.9 million related to CINVANTI, $11.0 million related to ZYNRELEF, $2.9 million related to SUSTOL and $0.1 million related to APONVIE. As of December 31, 2023, total inventory included $26.4 million related to CINVANTI, $11.2 million related to ZYNRELEF, $4.1 million related to SUSTOL and $0.4 million for APONVIE. For the three and six months ended June 30, 2024, cost of product sales included charges of $1.6 million relating to reserves and write-offs of inventory. For the three and six months ended June 30, 2023, cost of product sales included charges of $7.5 million and $12.8 million, respectively, relating to the write-off of inventory.

Accounting Policies - Percentage of Product Sales and Accounts Receivable Balance (Details) - Customer Concentration Risk

3 Months Ended

6 Months Ended

Jun. 30, 2024

Revenue Benchmark | Largest Customer

Product Information [Line Items]

Concentration risk percentage

^[1]

46.00%

45.10%

Revenue Benchmark | Second Largest Customer

Product Information [Line Items]

Concentration risk percentage

34.60%

36.20%

Revenue Benchmark | Third Largest Customer

Product Information [Line Items]

Concentration risk percentage

18.30%

17.70%

Revenue Benchmark | Total Customer

Product Information [Line Items]

Concentration risk percentage

98.90%

99.00%

Accounts Receivable | Largest Customer

Product Information [Line Items]

Concentration risk percentage

^[1]

45.70%

Accounts Receivable | Second Largest Customer

Product Information [Line Items]

Concentration risk percentage

35.10%

Accounts Receivable | Third Largest Customer

Product Information [Line Items]

Concentration risk percentage

18.80%

Accounts Receivable | Total Customer

Product Information [Line Items]

Concentration risk percentage

99.60%

[1]	Includes net product sales and accounts receivable balances for a subsidiary of Customer A that were reported separately in the Company’s Form 10-Q for the three months ended March 31, 2024, filed with the SEC on May 7, 2024.

Short-Term Investments - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Short-Term Investments [Abstract]
Debt securities, impairment losses	$ 0	$ 0	$ 0	$ 0
Debt securities, available-for-sale, realized gain (loss)	$ 0	$ 0	$ 0	$ 0

Equity Incentive Plan - Summary of Restricted Stock Unit Activity (Details) - Restricted Stock Units shares in Thousands	6 Months Ended
	Jun. 30, 2024 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares outstanding \| shares	1,405
Number of shares granted \| shares	1,482
Number of shares released \| shares	(829)
Number of shares expired and forfeited \| shares	(415)
Number of shares outstanding \| shares	1,642
Weighted-Average Grant Date Fair Value, outstanding \| $ / shares	$ 4.43
Weighted-Average Grant Date Fair Value, granted \| $ / shares	2.3
Weighted-Average Grant Date Fair Value, released \| $ / shares	2.63
Weighted-Average Grant Date Fair Value, expired and forfeited \| $ / shares	3.67
Weighted-Average Grant Date Fair Value, outstanding \| $ / shares	$ 2.97

Equity Incentive Plan

6 Months Ended

Jun. 30, 2024

Equity [Abstract]

Equity Incentive Plan

10. Equity Incentive Plan

Option Plan Activity

The following table summarizes the stock option activity for the six months ended June 30, 2024:


	Shares (in thousands)			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)
Outstanding at December 31, 2023		24,575		$	7.06		5.60
Granted		6,826		$	2.23
Exercised		(372	)	$	2.46
Expired and forfeited		(3,584	)	$	11.17
Outstanding at June 30, 2024		27,445		$	5.38		7.74


	For the Six Months Ended
	June 30,
	2024			2023
Risk-free interest rate		4.2	%		3.6	%
Dividend yield		0.0	%		0.0	%
Volatility		74.9	%		67.4	%
Expected life (years)	6 to 10			6 to 10


	For the Six Months Ended
	June 30,
	2024			2023
Risk-free interest rate		5.4	%		5.1	%
Dividend yield		0.0	%		0.0	%
Volatility		83.6	%		97.1	%
Expected life (months)		6			6

The following table summarizes the restricted stock unit activity (“RSUs”) for the six months ended June 30, 2024:


	Shares (in thousands)			Weighted-Average Grant Date Fair Value
Outstanding at December 31, 2023		1,405		$	4.43
Granted		1,482		$	2.30
Released		(829	)	$	2.63
Expired and forfeited		(415	)	$	3.67
Outstanding at June 30, 2024		1,642		$	2.97

The fair value of RSUs is estimated based on the closing market price of our common stock on the date of the grant. RSUs generally vest quarterly over a four-year period.

Stock-Based Compensation

The following table summarizes stock-based compensation expense related to stock-based payment awards granted pursuant to all of our equity compensation arrangements (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Research and development	$	553	$	2,694	$	1,254	$	4,430
General and administrative		2,060		6,925		3,938		10,457
Sales and marketing		1,957		4,281		2,753		6,960
Total stock-based compensation expense	$	4,570	$	13,900	$	7,945	$	21,847

As of June 30, 2024, there was $23.6 million of total unrecognized compensation cost related to non-vested, stock-based payment awards granted under all of our equity compensation plans and all non-plan option grants. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures. We expect to recognize this compensation cost over a weighted-average period of three years.

Inventory (Tables)

6 Months Ended

Jun. 30, 2024

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventory consists of the following (in thousands):


	June 30, 2024		December 31, 2023
Raw materials	$	19,594	$	17,643
Work in process		16,051		14,550
Finished goods		7,219		9,917
Total inventory	$	42,864	$	42,110

Fair Value Measurements - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Jun. 30, 2024	Dec. 31, 2023
Fair Value Disclosures [Abstract]
Financial instruments transferred among fair value hierarchy levels	$ 0
Cash equivalents included of available-for-sale securities		$ 4,200,000	$ 5,300,000
Available for sale securities with contractual maturities of three months to one year.		$ 19,100,000	$ 51,700,000

Equity Incentive Plan - Additional Information (Details) $ in Millions	6 Months Ended
	Jun. 30, 2024 USD ($)
Class Of Stock [Line Items]
Total unrecognized compensation cost related to non-vested, stock-based payment awards	$ 23.6
Total unrecognized compensation cost, expect to recognize over weighted average period	3 years
Restricted Stock Units
Class Of Stock [Line Items]
Share-based compensation arrangement by share-based payment award, award vesting period	4 years

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Accounting Policies - Common Stock Equivalents Excluded From Computation of Net Loss Per Share (Details) - shares shares in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Share-based Payment Arrangement, Option
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Shares excluded (in shares)	27,445	28,778
Restricted Stock Units
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Shares excluded (in shares)	1,642	2,732
Warrant
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Shares excluded (in shares)	298	8,548
Convertible Debt Securities
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Shares excluded (in shares)	9,819	9,819

Accounting Policies

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Accounting Policies

3. Accounting Policies

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of Heron Therapeutics, Inc. and its wholly owned subsidiary, Heron Therapeutics B.V., which was organized in the Netherlands in March 2015. Heron Therapeutics B.V. has no operations and no material assets or liabilities, and there have been no significant transactions related to Heron Therapeutics B.V. since its inception.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and disclosures made in the accompanying notes to the financial statements. Our significant accounting policies that involve significant judgment and estimates include revenue recognition, investments, inventory and the related reserves, accrued clinical liabilities, income taxes and stock-based compensation. Actual results could differ materially from those estimates.

Cash, Cash Equivalents and Short-Term Investments

Cash and cash equivalents consist of cash and highly liquid investments with contractual maturities of three months or less from the original purchase date.

Short-term investments consist of securities with contractual maturities of greater than three months from the original purchase date. Securities with contractual maturities greater than one year are classified as short-term investments on the condensed consolidated balance sheets, as we have the ability, if necessary, to liquidate these securities to meet our liquidity needs in the next 12 months. We have classified our short-term investments as available-for-sale securities in the accompanying condensed consolidated financial statements. Available-for-sale securities are stated at fair market value, with net changes in unrealized gains and losses reported in other comprehensive income (loss) and realized gains and losses included in other income (expense), net. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in interest income within other income (expense), net.

Our bank and investment accounts have been placed under a control agreement in accordance with our working capital facility agreement (see Note 8).

Concentration of Credit Risk

Cash, cash equivalents and short-term investments are financial instruments that potentially subject us to concentrations of credit risk. We deposit our cash in financial institutions. At times, such deposits may be in excess of insured limits. We have not experienced any losses in such accounts and believe we are not exposed to significant risk with respect to our cash, cash equivalents and short-term investments, however, any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company's financial condition, results of operations and cash flows.

We may also invest our excess cash in money market funds, U.S. government and agencies, corporate debt securities and commercial paper. We have established guidelines relative to our diversification of our cash investments and their maturities in an effort to maintain safety and liquidity. These guidelines are periodically reviewed and modified to take advantage of trends in yields and interest rates.

ZYNRELEF, APONVIE, CINVANTI and SUSTOL (collectively, our “Products”) are distributed in the U.S. through a limited number of specialty distributors and full line wholesalers (collectively, “Customers”) that resell to healthcare providers and hospitals, the end users of our Products.

The following table includes the percentage of net product sales and accounts receivable balances for our three major Customers, each of which comprised 10% or more of our product sales:


	Net Product Sales						Accounts Receivable
	Three Months Ended June 30, 2024			Six Months Ended June 30, 2024			As of June 30, 2024
Customer A(1)		46.0	%		45.1	%		45.7	%
Customer B		34.6	%		36.2	%		35.1	%
Customer C		18.3	%		17.7	%		18.8	%
Total		98.9	%		99.0	%		99.6	%

(1)

Accounts Receivable, Net

Accounts receivable are recorded at the invoice amount, net of an allowance for credit losses. The allowance for credit losses reflects accounts receivable balances that are believed to be uncollectible. As of June 30, 2024, we do not have an allowance for credit losses. In estimating the allowance for credit losses, we consider (1) our historical experience with collections and write-offs; (2) the credit quality of our Customers and any recent or anticipated changes thereto; (3) the outstanding balances and past due amounts from our Customers; and (4) reasonable and supportable forecast of economic conditions expected to exist throughout the contractual term of the receivable.

Inventory

Inventory is stated at the lower of cost or estimated net realizable value on a first-in, first-out, or FIFO, basis. We periodically analyze our inventory levels and write down inventory that has become obsolete, inventory that has a cost basis in excess of its estimated realizable value and inventory quantities that are in excess of expected sales requirements as cost of product sales. The determination of whether inventory costs will be realizable requires estimates by management. If actual market conditions are less favorable than projected by management, additional write-downs of inventory may be required, which would be recorded as cost of product sales.

Property and Equipment, Net

Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets (generally 5 years). Leasehold improvements are stated at cost and amortized on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term. During the three months ended June 30, 2024 we incurred a loss on the write-off of property and equipment of $3.1 million, of which $2.5 million relates to a project for which we had a one-time settlement gain contingency related to a legal dispute, during the three months ended March 31, 2024. This loss was recorded to other (expense) income, net. The remaining loss was recorded to operating expenses.

Leases

We determine if an arrangement is a lease or contains lease components at inception. Operating leases with an initial term greater than 12 months are recorded as lease liabilities with corresponding right-of-use (“ROU”) lease assets on the condensed consolidated balance sheets. ROU lease assets represent our right to use the underlying assets over the lease term, and lease liabilities represent the present value of our obligation to make lease payments arising from the lease. Lease liabilities are recognized at the lease commencement based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. The ROU lease assets equal the lease liabilities, less unamortized lease incentives, unamortized initial direct costs and the cumulative difference between rent expense and amounts paid under the lease. The lease term includes any option to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. We have elected the practical expedient to not separate lease and non-lease components.

Revenue Recognition

Revenue is recognized in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“Topic 606”). Topic 606 is based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

Product Sales

Our Products are distributed in the U.S. through a limited number of Customers that resell to healthcare providers and hospitals, the end users of our Products.

Revenue is recognized in an amount that reflects the consideration we expect to receive in exchange for our Products. To determine revenue recognition for contracts with Customers within the scope of Topic 606, we perform the following five steps: (i) identify the contract(s) with a Customer; (ii) identify the performance obligations of the contract(s); (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract(s); and (v) recognize revenue when (or as) we satisfy the performance obligations. We recognize revenue from Product sales when there is a transfer of control of the Product to our Customers. We typically determine transfer of control based on when the Product is delivered, and title passes to our Customers.

Product Sales Allowances

We recognize product sales allowances as a reduction of product sales in the same period the related revenue is recognized. Product sales allowances are based on amounts owed or to be claimed on the related sales. Such variable consideration includes estimates that take into consideration the terms of our agreements with Customers, historical product returns, rebates or discounts taken, the shelf life of the product and specific known market events, such as competitive pricing and new product introductions. If actual future results vary from our estimates, we may need to adjust these estimates, which could have an effect on product sales and earnings in the period of adjustment. Our product sales allowances include:

•

Product Returns—We allow the majority of our Customers to return product for credit beginning three months prior to the product expiration date and up to 12 months after the product expiration date. As such, there may be a significant period of time between the time the product is shipped and the time the credit is issued on returned product.

•

Distributor Fees—We pay distribution service fees to our Customers based on a contractually fixed percentage of the wholesale acquisition costs and fees for data. These fees are paid no later than two months after the quarter in which product was shipped.

•

Group Purchasing Organization (“GPO”) Discounts and Rebates—We offer cash discounts to GPO members. These discounts are taken when the GPO members purchase product from our Customers, who then charge back to us the discount amount. Additionally, we offer volume and contract-tier rebates to GPO members. Rebates are based on actual purchase levels during the quarterly rebate purchase period.

•

GPO Administrative Fees—We pay administrative fees to GPOs for services and access to data. These fees are based on contracted terms and are paid after the quarter in which the product was purchased by the GPO's members.

•

Medicaid Rebates—We participate in Medicaid rebate programs, which provide assistance to certain low-income patients based on each individual state’s guidelines regarding eligibility and services. Under the Medicaid rebate programs, we pay a rebate to each participating state, generally within six months after the quarter in which the product was sold.

•

Prompt Pay Discounts—We may provide discounts on product sales to our Customers for prompt payment based on contractual terms.

We believe our estimated allowance for product returns and GPO discounts requires a high degree of judgment and is subject to change based on our experience and certain quantitative and qualitative factors. We believe our estimated allowances for distributor fees, GPO rebates and administrative fees, Medicaid rebates and prompt pay discounts do not require a high degree of judgment because the amounts are settled within a relatively short period of time.

Our product sales allowances and related accruals are evaluated each reporting period and adjusted when trends or significant events indicate that a change in estimate is appropriate. Changes in product sales allowance estimates could materially affect our results of operations and financial position.

The following table provides disaggregated net product sales (in thousands):


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2024		2023		2024		2023
CINVANTI net product sales	$	24,927	$	24,474	$	50,544	$	47,329
SUSTOL net product sales		4,246		2,836		7,860		5,819
ZYNRELEF net product sales		5,831		4,128		10,844		7,661
APONVIE net product sales		1,020		324		1,446		568
Total net product sales	$	36,024	$	31,762	$	70,694	$	61,377


	Product Returns			Distributor Fees			Discounts, Rebates and Administrative Fees			Total
Balance at December 31, 2023	$	4,776		$	4,419		$	27,334		$	36,529
Provision		(1,216	)		14,212			101,867			114,863
Payments/credits		(517	)		(12,969	)		(100,890	)		(114,376	)
Balance at June 30, 2024	$	3,043		$	5,662		$	28,311		$	37,016

Comprehensive Income (Loss)

Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. Net changes in unrealized gains and losses on available-for-sale securities are included in other comprehensive income (loss) and represent the difference between our net loss and comprehensive loss for all periods presented.

Net Loss per Share

Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period, including pre-funded warrants to purchase shares of common stock. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock and common stock equivalents outstanding for the period determined using the treasury stock method. For purposes of this calculation, stock options, restricted stock units, warrants and shares of common stock underlying convertible notes are considered to be common stock equivalents and are included in the calculation of diluted net loss per share only when their effect is dilutive.


	June 30,
	2024		2023
Stock options outstanding		27,445		28,778
Restricted stock units outstanding		1,642		2,732
Warrants outstanding		298		8,548
Shares of common stock underlying convertible notes outstanding		9,819		9,819

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that we adopt as of the specified effective date. We have evaluated recently issued accounting pronouncements and do not believe any will have a material impact on our condensed consolidated financial statements or related financial statement disclosures.

In December 2023, the FASB issued Accounting Standards Update ("ASU") No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"), to enhance income tax reporting disclosures and require disclosure of

specific categories in the tabular rate reconciliation. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, on a prospective basis. Early adoption and retrospective application are permitted. We are currently evaluating the impact on our disclosures.

Inventory - Schedule of Inventory (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Inventory Disclosure [Abstract]
Raw materials	$ 19,594	$ 17,643
Work in process	16,051	14,550
Finished goods	7,219	9,917
Total inventory	$ 42,864	$ 42,110

Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the requirements of the SEC for interim reporting. Accordingly, since they are interim statements, they do not include all of the information and disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for other quarters or the year ending December 31, 2024. The condensed consolidated balance sheet as of December 31, 2023 has been derived from the audited financial statements as of that date. For more complete financial information, these condensed consolidated financial statements and the notes thereto should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on March 12, 2024.

Reclassification of Certain Expenses

The condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2023 reflect reclassification of certain expenses from research and development to general and administrative expenses to align with the Company's presentation for the three and six months ended June 30, 2024 as a result of the restructuring implemented in 2023 and the realignment of the Company's departments. This presentation results in no change to total operating expenses, loss from operations or net loss and no pro forma financial information is necessary.

Principles of Consolidation

Use of Estimates

Cash, Cash Equivalents and Short-term Investments

Cash, Cash Equivalents and Short-Term Investments

Cash and cash equivalents consist of cash and highly liquid investments with contractual maturities of three months or less from the original purchase date.

Our bank and investment accounts have been placed under a control agreement in accordance with our working capital facility agreement (see Note 8).

Concentration of Credit Risk

The following table includes the percentage of net product sales and accounts receivable balances for our three major Customers, each of which comprised 10% or more of our product sales:


	Net Product Sales						Accounts Receivable
	Three Months Ended June 30, 2024			Six Months Ended June 30, 2024			As of June 30, 2024
Customer A(1)		46.0	%		45.1	%		45.7	%
Customer B		34.6	%		36.2	%		35.1	%
Customer C		18.3	%		17.7	%		18.8	%
Total		98.9	%		99.0	%		99.6	%

(1)

Accounts Receivable, Net

Inventory

Property and Equipment, Net

Leases

Revenue Recognition

Product Sales

Our Products are distributed in the U.S. through a limited number of Customers that resell to healthcare providers and hospitals, the end users of our Products.

Product Sales Allowances

•

Prompt Pay Discounts—We may provide discounts on product sales to our Customers for prompt payment based on contractual terms.

The following table provides disaggregated net product sales (in thousands):


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2024		2023		2024		2023
CINVANTI net product sales	$	24,927	$	24,474	$	50,544	$	47,329
SUSTOL net product sales		4,246		2,836		7,860		5,819
ZYNRELEF net product sales		5,831		4,128		10,844		7,661
APONVIE net product sales		1,020		324		1,446		568
Total net product sales	$	36,024	$	31,762	$	70,694	$	61,377


	Product Returns			Distributor Fees			Discounts, Rebates and Administrative Fees			Total
Balance at December 31, 2023	$	4,776		$	4,419		$	27,334		$	36,529
Provision		(1,216	)		14,212			101,867			114,863
Payments/credits		(517	)		(12,969	)		(100,890	)		(114,376	)
Balance at June 30, 2024	$	3,043		$	5,662		$	28,311		$	37,016

Comprehensive Income (Loss)

Net Loss per Share


	June 30,
	2024		2023
Stock options outstanding		27,445		28,778
Restricted stock units outstanding		1,642		2,732
Warrants outstanding		298		8,548
Shares of common stock underlying convertible notes outstanding		9,819		9,819

Recent Accounting Pronouncements

Equity Incentive Plan - Summary of Stock Option Activity (Details) - $ / shares shares in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2024	Dec. 31, 2023
Equity [Abstract]
Number of shares outstanding	24,575
Number of shares granted	6,826
Number of shares exercised	(372)
Number of shares expired and forfeited	(3,584)
Number of shares outstanding	27,445	24,575
Weighted-Average Exercise Price, outstanding	$ 7.06
Weighted-Average Exercise Price, granted	2.23
Weighted-Average Exercise Price, exercised	2.46
Weighted-Average Exercise Price, expired and forfeited	11.17
Weighted-Average Exercise Price, outstanding	$ 5.38	$ 7.06
Weighted-Average Remaining Contractual Term (Years)	7 years 8 months 26 days	5 years 7 months 6 days

Accounting Policies - Summary of Activity to Product Returns, Distributor Fees and Discounts, Rebates and Administrative Fees (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2024 USD ($)
Product Information [Line Items]
Balance	$ 36,529
Provision	114,863
Payments/credits	(114,376)
Balance	37,016
Product Returns
Product Information [Line Items]
Balance	4,776
Provision	(1,216)
Payments/credits	(517)
Balance	3,043
Distributor Fees
Product Information [Line Items]
Balance	4,419
Provision	14,212
Payments/credits	(12,969)
Balance	5,662
Discounts, Rebates and Administrative Fees
Product Information [Line Items]
Balance	27,334
Provision	101,867
Payments/credits	(100,890)
Balance	$ 28,311

Condensed Consolidated Statements of Stockholders' Deficit (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit
Balance at Dec. 31, 2022	$ 13,572	$ 1,191	$ 1,807,855	$ (19)	$ (1,795,455)
Balance (in shares) at Dec. 31, 2022		119,155
Issuance of common stock under equity incentive plan	(208)	$ 2	(210)
Issuance of common stock under equity incentive plan (in shares)		125
Stock-based compensation expense	7,947		7,947
Net loss	(32,768)				(32,768)
Net unrealized gains (loss) on short-term investments	28			28
Comprehensive loss	(32,740)
Balance at Mar. 31, 2023	(11,429)	$ 1,193	1,815,592	9	(1,828,223)
Balance (in shares) at Mar. 31, 2023		119,280
Balance at Dec. 31, 2022	13,572	$ 1,191	1,807,855	(19)	(1,795,455)
Balance (in shares) at Dec. 31, 2022		119,155
Net loss	(74,827)
Net unrealized gains (loss) on short-term investments	13
Comprehensive loss	(74,814)
Balance at Jun. 30, 2023	(39,284)	$ 1,199	1,829,805	(6)	(1,870,282)
Balance (in shares) at Jun. 30, 2023		119,956
Balance at Mar. 31, 2023	(11,429)	$ 1,193	1,815,592	9	(1,828,223)
Balance (in shares) at Mar. 31, 2023		119,280
Issuance of common stock under equity incentive plan	(385)	$ 3	(388)
Issuance of common stock under equity incentive plan (in shares)		330
Issuance of common stock under the employee stock purchase plan	704	$ 3	701
Issuance of common stock under the employee stock purchase plan (in shares)		346
Stock-based compensation expense	13,900		13,900
Net loss	(42,059)				(42,059)
Net unrealized gains (loss) on short-term investments	(15)			(15)
Comprehensive loss	(42,074)
Balance at Jun. 30, 2023	(39,284)	$ 1,199	1,829,805	(6)	(1,870,282)
Balance (in shares) at Jun. 30, 2023		119,956
Balance at Dec. 31, 2023	(33,973)	$ 1,503	1,870,525	13	(1,906,014)
Balance (in shares) at Dec. 31, 2023		150,285
Issuance of common stock under equity incentive plan	11	$ 1	10
Issuance of common stock under equity incentive plan (in shares)		93
Stock-based compensation expense	3,375		3,375
Net loss	(3,160)				(3,160)
Net unrealized gains (loss) on short-term investments	(19)			(19)
Comprehensive loss	(3,179)
Balance at Mar. 31, 2024	(33,766)	$ 1,504	1,873,910	(6)	(1,909,174)
Balance (in shares) at Mar. 31, 2024		150,378
Balance at Dec. 31, 2023	(33,973)	$ 1,503	1,870,525	13	(1,906,014)
Balance (in shares) at Dec. 31, 2023		150,285
Net loss	(12,395)
Net unrealized gains (loss) on short-term investments	(21)
Comprehensive loss	(12,416)
Balance at Jun. 30, 2024	(37,940)	$ 1,516	1,878,961	(8)	(1,918,409)
Balance (in shares) at Jun. 30, 2024		151,578
Balance at Mar. 31, 2024	(33,766)	$ 1,504	1,873,910	(6)	(1,909,174)
Balance (in shares) at Mar. 31, 2024		150,378
Issuance of common stock under equity incentive plan	318	$ 9	309
Issuance of common stock under equity incentive plan (in shares)		872
Issuance of common stock under the employee stock purchase plan	175	$ 3	172
Issuance of common stock under the employee stock purchase plan (in shares)		328
Stock-based compensation expense	4,570		4,570
Net loss	(9,235)				(9,235)
Net unrealized gains (loss) on short-term investments	(2)			(2)
Comprehensive loss	(9,237)
Balance at Jun. 30, 2024	$ (37,940)	$ 1,516	$ 1,878,961	$ (8)	$ (1,918,409)
Balance (in shares) at Jun. 30, 2024		151,578