Company: HRTX
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0000950170-25-028374
Chunk: 166

Company: HERON THERAPEUTICS, INC. /DE/
Filing Date: 2025-02-27
Form: 10-K
Item: Item 7
Chunk 166
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 expense for tax and financial statement purposes. As part of the process of preparing our consolidated financial statements, we are required to estimate our income taxes for each of the jurisdictions in which we operate. This process involves estimating our current tax exposure under the most recent tax laws and assessing temporary differences resulting from differing treatment of items for tax and financial statement purposes. At December 31, 2024, we established a valuation allowance to offset our deferred tax assets due to the uncertainty of realizing future tax benefits from our net operating loss carryforwards and other deferred tax assets. To date, our estimates have not materially changed. However, subsequent changes in estimates may result in a significant change to our deferred tax assets and liabilities, which could materially affect our results of operations and financial condition.

Stock-based Compensation

We estimate the fair value of stock options granted using the Black-Scholes option pricing model and for market-based stock option grants using the Monte Carlo simulation model. This fair value is then amortized over the requisite service periods of the awards. The Black-Scholes option pricing model requires the input of subjective assumptions, including each option’s expected life and price volatility of the underlying stock. Expected volatility is based on our historical stock price volatility. The expected life of employee stock options represents the average of the contractual term of the options and the weighted-average vesting period, as permitted under the simplified method. To date, our assumptions used in our calculation of stock-based compensation expense has not significantly changed. However, subsequent changes in our assumptions could impact our stock-based compensation expense, which could materially affect our net loss and net loss per share. 

Recent Accounting Pronouncements

See Note 2 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

65

Results of Operations

Comparison of Results of Operations

    Years Ended December 31,

    ($ in thousands)
     
    2024

    % of Sales

    2023

    % of Sales

    2022

    % of Sales

    Net product sales
     
    $
    144,285

    $
    127,044

    $
    107,672

    Cost of product sales

    38,648

    26.8
    %

    65,105

    51.2
    %

    54,874

    51.0
    %

    Gross Profit
     
    $
    105,637

    $
    61,939