Brean Capital Sees A $300 Million Opportunity For Heron Therapeutics New Drug Launch

Brean Capital thinks Heron Therapeutics Inc HRTX has a $300 million opportunity over the next five years from yet-to-be-launched Sustol.

Sustol is the first and only approved 5-HT3 receptor antagonist with an extended-release effect and 5 days of Chemotherapy Induced Vomiting (CINV) prevention for moderately emetogenic chemotherapy (MEC) and most highly emetogenic chemotherapy (HEC) regimens.

Analyst Jason Wittes said by year-end the company will also submit HTX-019, a proprietary intravenous (IV) formulation of Aprepitant, a NK1 receptor antagonist for CINV prevention, and expected to be approved by the end of 2017.

In addition, Wittes pointed out that HTX-011, Heron's proprietary long-acting formulation ofbupivacaine/meloxicam for post-operative pain, is potentially a multi-billion dollar opportunity. The drug showed significant reductions in pain and opoid use in mid-stage studies.

"As such, we see the Phase III trial as largely de-risked, which should lead to a NDA submission in 2018," Wittes wrote in a note.

Wittes assumed coverage of Heron with an Outperform rating and target price of $41, implying a potential upside of 147 percent over Oct.3 closing price.

At time of writing, shares of Heron fell 3.67 percent to $16.00.