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Company Update May 2017 Forward-Looking Statements This presentation contains "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995. We caution investors that forward-looking statements are based on management’s expectations and assumptions as of the date of this presentation, and involve substantial risks and uncertainties that could cause our clinical development programs, future results, performance or achievements to differ significantly from those expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, those associated with: the potential market opportunity for SUSTOL®, CINVANTI™ and HTX-011, timing of potential generic forms of palonosetron and the potential impact on sales of SUSTOL, the timing and outcome of the End of Phase 2 meeting with the FDA for HTX-011, the timing of acceptance of the NDA for CINVANTI™, the timing of the NDA filing for HTX-011, the timing of initiating Phase 3 studies for HTX-011, the projected sufficiency of our capital position for future periods, our ability to repay any indebtedness, the progress in the research and development of HTX-011 and our other programs, including the timing of preclinical, clinical, and manufacturing activities, safety and efficacy results from our studies, and other risks and uncertainties identified in the Company's filings with the Securities and Exchange Commission. Forward-looking statements reflect our analysis only on their stated date, and we take no obligation to update or revise these statements except as may be required by law. 2 Status of Product Portfolio CINV Pain Preclinical Clinical NDA Approved SUSTOL® (granisetron) extendedrelease injection CINVANTI™ (HTX019) aprepitant for Now Approved by U.S. Food and Drug Administration IV NK1 for CINV Prevention PDUFA Date of November 12, 2017 injection HTX-011 bupivacaine + meloxicam ER Local Administration HTX-011 bupivacaine + meloxicam ER Nerve Block 3 Post-Op Pain in Local Administration Post-Op Pain in Nerve Block Data from four positive Phase 2 studies in multiple surgical models Phase 2 program in nerve block initiated CINV PROGRAMS: SUSTOL® CINVANTI™ (aprepitant for injection) SUSTOL® Performance Launch Update Date of first commercial sale: October 11, 2016 143 practices have ordered SUSTOL (91% increase vs. Q4) representing ~35% of the 1.4M targeted Aloxi units 5 Q1 2017 performance: ~10,300 units sold, $495 WAC, ~$3.6M net sales (184% increase from Q4 2016) Positive payer coverage: all 12 Medicare MACs covering (44M lives) and commercial plans representing 139M Market Research Insights (Conducted eight weeks post-launch and updated in March 2017) • Practices go through a “buying process” to evaluate adoption of new drugs which may last several quarters – Practices assess coverage, time to payment, reimbursement rate in addition to clinical experience and impact to practice operations • HCPs who have begun SUSTOL trial, report positive experiences both clinically and operationally • Most RNs with SUSTOL experience are satisfied and have been able to administer it successfully 46 Percent of MDs Evaluating SUSTOL® as Potential Branded Agent of Choice (~6-9 Month Timeline) Degree of MD Experience With SUSTOL Practice’s Experience With SUSTOL Trial 100% 17% I and other MDs in my practice have used SUSTOL 23% I have used SUSTOL but other MDs have not 11% I have not used SUSTOL but other MDs have 5% We will try SUSTOL and are operationalizing it 80% 60% 40% 20% 7% 13% 31% Safety 8% 38% 31% Preparation and administration 8% 46% 23% 15% 100% 6% 1-3 months 80% 27% 4-6 months 60% 13% > 6 months 10% SUSTOL will probably be our brand of choice but not sure when 39% Not yet sure if SUSTOL will become our brand of choice 40% SUSTOL is under consideration We have decided not to use SUSTOL No discussions regarding SUSTOL to date Which of the following best describes you / your practice? Please select one. - Putnam Physician Survey Nov 2016 (N=85) 6 38% Payer coverage 8% 31% 23% 0% Efficacy 8% Timing for SUSTOL To Be Brand of Choice Impact to practice 15% 31% 8% operations Payer reimbursement 8% 23% 8% rate / time Extremely positive (6-7) 20% Positive (5) Negative (3) Extremely Negative (1-2) What has been the experience with SUSTOL use in your practice? Please rate 1-7. - Putnam Practice Manager Survey Nov 2016 (N=40) 0% 5% SUSTOL won’t be our brand of choice In what timeframe do you expect SUSTOL to become the practice’s branded 5-HT3 of choice? - Putnam Physician Survey Nov 2016 (N=85) Most RNs with SUSTOL® Experience are Satisfied, Have Administered Successfully RN Overall Experience Administering SUSTOL 100% RN View of SUSTOL vs. other oncology SC products 100% 14% 80% 60% 14% SUSTOL is similar to other subcutaneous injections in oncology 81% SUSTOL prep and admin are unique, but we have been able to administer it successfully 80% Very satisfied (6-7) 57% 60% Satisfied (5) Neither satisfied nor dissatisfied (4) Dissatisfied (3) 40% Very dissatisfied(1-2) 20% 0% 24% 20% 5% Please rate your overall experience administering SUSTOL to patients. Please rate 1-7. - Putnam Nurse Survey Nov 2016 (N=85, n=21) 7 40% 0% 5% We have had significant difficulty administering SUSTOL Which of the following best describes your experience preparing and administering SUSTOL to patients? - Putnam Nurse Survey Nov 2016 (N=85, n=21) CINV Prophylaxis Requires Two Complimentary Mechanisms of Action • EMEND IV® is currently the only intravenous NK1 receptor antagonist on the US market and has >90% of the total NK1 market • Infusion reactions (predominately infusion site pain) and hypersensitivity reactions observed with EMEND IV® are believed to be caused by the surfactant polysorbate 80 in the product CINVANTI™ (HTX-019) (aprepitant for injection) is an investigational proprietary, surfactant-free intravenous formulation of the NK1 receptor antagonist aprepitant 8 CINVANTI™ (HTX-019) for CINV PDUFA Date of November 12, 2017 BE Study #104 Safety Results • CINVANTI™ is a proprietary, surfactant-free intravenous (IV) formulation of the NK1 receptor antagonist aprepitant – Bioequivalency study comparing HTX-019 to EMEND IV® (fosaprepitant) completed: • Bioequivalence achieved for AUC • Significantly fewer adverse events with HTX-019 • Direct competitor to the >1 million units of EMEND IV® used annually • US 15/083,071 received a notice of allowance and will provide exclusivity to March 2036 9 HTX-019 EMEND IV SAFETY Events Patients Events Patients Total AEs 27 21% 54 28% AEs considered related 18 15% 52 28% SAEs 0 - 0 - Moderate AEs 0 - 6 2% AEs leading to discontinuations 0 - 2 2% Final dataset 100 subjects received HTX-019 and EMEND IV® in standard cross-over design Conclusion: HTX-019 was better tolerated than EMEND IV®, with 65% fewer AEs at least possibly related to treatment, no AEs of greater than mild severity, no premature discontinuations 2017 CINV Franchise Outlook Heron expects steady but measured growth in SUSTOL® trial and adoption • Continue to anticipate $15M - $25M in SUSTOL net sales in 2017 CINVANTI™ (HTX-019) program advancing • PDUFA date November 12, 2017, launch Q1 2018 • If approved, Heron would be the first company to address both mechanisms of action for the prophylaxis of CINV with injectable products • Offers strong strategic and operational fit with existing commercial organization 10 Post-Operative Pain Program HTX-011: Proprietary Extended-Release Combination of Bupivacaine + Meloxicam Market Is Large and Local Anesthetic Use Is Common, but Long-Acting Anesthetics Have Not Fulfilled the Promise Procedures Requiring PostOperative Pain Relief, 2015-20201 Number of Procedures (Millions) 35 30 28 29 30 31 31 Local Anesthetic Usage Across Key Surgeries, 20151* 3% 32 long-acting anesthetics 25 20 74% 15 Generic local anesthetics 10 Key Limiters of Current LongActing Anesthetics Penetration • Perceived inability to achieve marketed duration of efficacy2 • No large scale studies have shown superiority versus bupivacaine solution 23% No local anesthetics 5 • HCPs not persuaded that incremental efficacy is worth the cost • Formulary access restrictions2 0 2015 2016 2017 2018 2019 2020 Procedure growth driven by aging population and more active seniors ‒ Many institutions restrict usage to certain departments, procedures, or do not have a long-acting local anesthetic on formulary ‒ Very low penetration in ASC and office settings1 Sources: 1- DRG claims analysis (2015), DRG Post-Operative Pain Pharmacor; 2- DRG physician and P&T member interviews (2016; n=106); *Based on analysis of current post-operative pain management across 40 target procedures (~28M procedures) 12 HTX-011 Has the Potential to Transform PostOperative Pain Management Product Attribute 13 Generic Long-Acting Local Local Anesthetics Anesthetics HTX-011 Extended-release formulation No Yes Yes Synergistic MOA potentiates local anesthetic efficacy by reducing inflammation No No Yes Consistent 72 hour efficacy No No Yes Head-to-head superiority vs. bupivacaine N/A No Yes Applicable in large and small procedures without admixture with bupivacaine solution N/A No Yes Easy to learn, flexible administration with potential safety advantages No No Yes Source: 1 – DRG physician and P&T member interviews (2016; n=106) “I would love a product that is superior to Exparel® in that it actually provided 72 hours of pain relief; this would reduce rates of nausea, vomiting, and constipation and help us discharge patients sooner.” – General Surgeon1 “We’re looking for an injectable lasting 72 hours; this would address the critical, most painful window of time following surgery and could potentially eliminate the need for additional pain treatments.” – Plastic Surgeon1 “If a local anesthetic could provide significant pain relief for 48-72 hours, patients could be up and moving more quickly and have significant reduction in length of stay as well as opioid use post-operatively.” – Orthopedic Surgeon1 “If we could numb the surgical area for three days, we would have a lot of patient satisfaction and if a patient is satisfied, they’re not going to be calling us for the next three days. – Anesthesiologist1 ACUTE PAIN AFTER SURGERY IS AN IMPORTANT COMPONENT OF CHRONIC OPIOID ABUSE 14 Risk of Chronic Opioid Use After Selected Surgeries Adjusted Odds Ratio for Chronic Opioid Use 0 1 2 3 4 Total Knee Arthroplasty 6 5.1 Open Cholecystectomy 3.6 Simple Mastectomy 2.6 Total Hip Arthroplasty 2.5 Open Appendectomy 1.7 Laproscopic Cholecystectomy Cesarean Delivery 5 1.6 1.3 Based on data from 641,941 opioid-naïve surgical patients compared to 18 million opioid-naïve non-surgical patients (Sun, et al. JAMA Internal Med 2016; 176(9):1286-1293) In Addition to Potential Addiction, Opioids Increase Healthcare Costs Due to a High Rate of Side-Effects Cost of Opioid-Related Adverse Drug Events1,2 Moderate to Severe OpioidInduced ADE Cost per ADE Events in 2013 $ Ileus $6,141 Pruritus $502 Urinary Retention $1,867 Respiratory Depression $1,504 PONV $1,225 Mental Status Change $2,263 *All AE costs derived from Oderda 2003 with exception of ileus which is from Simons et al. †Calculated from the half-year (January-June) data of the "Inpatient Hospital Services" component of the medical consumer price index in 1999-2013. Source: US Bureau of Labor Statistics. 16 1. Oderda GM, Evans RS, Lloyd J, et al. Cost of opioid-related adverse drug events in surgical patients. J Pain Symptom Manage. 2003;25:276-283. 2. Simons R, Kim M, Chow W. Retrospective analyses of adverse events and economic costs [abstract taken from Reg Anesth Pain Med. 2009;PS3:17]. Reducing Pain Signals at the Site of the Incision May Decrease the Development of Chronic Pain Activing on opiate receptors in the brain, opioids can reduce the sensation of pain, but do not block transmission of the pain signals. Occasionally, the affected nerves become hyper-stimulated resulting in chronic pain. 17 HTX-011 directly blocks transmission of the pain signal, potentially reducing the chance of chronic pain Biochronomer® Bupivacaine Produced Significant Reductions in Pain in Preclinical Models1 Pig Post-Operative Pain Model Higher bar = greater analgesia 18 Percentage of Maximal Force (60 gm) Tolerated by Animal Saline Control Biochronomer Bupivacaine Bupivacaine Liposome Injectable Suspension (2) 100.0 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 0 1. Post-operative pain model in pigs from Castle et al, 2013 EPJ 2. Human dose of bupivacaine liposome with 40% smaller incision (n=4 pigs) 1 3 5 HOURS 24 48 72 96 120 Inflammation Plays a Key Role in Pain Management (Current local anesthetics do not address this) BUPH+ BUPN + H+ • Inflammation produces an acidic environment Outside membrane Nerve Cell Membrane Inside membrane BUPH+ • Shifts the balance to ionized form, which is unable to penetrate nerve cell membrane BUPN + H+ • Acidic environment associated with inflammation results in far less drug penetrating the nerve membrane and reduced anesthetic effects1,2 • Bupivacaine is very sensitive to reduced pH • Addition of meloxicam is designed to help reduce local inflammation and allow bupivacaine to work better in the first several days after surgery 19 1. Ueno, et al. J of Inflammation Research 1:41-48 2008. 2. Local anesthetic nerve penetration model adapted from Becker and Reed, Anesth Prog 53:98–109 2006 Unique Combination of Bupivacaine & Meloxicam Produced Complete Analgesia1 Higher bar = Greater analgesia Percentage of Maximal Force (60 gm) Tolerated Pig Post-Operative Pain Model Saline Control Biochronomer Bupivacaine Bupivacaine Liposome Injectable Suspension (2) Biochronomer Bupivacaine + Meloxicam 6 Day Release 100.0 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 0 1 1. Post-operative pain model in pigs from Castle et al, 2013 EPJ 2. Human dose of bupivacaine liposome with 40% smaller incision 20 (n=4 pigs in each arm) 3 5 24 Hours 48 72 96 120 >72 Hour Duration of Action Seen as “Ideal” Ideal Duration of Efficacy for LongActing Local Anesthetic 5 days 4% Minimally Acceptable Duration of Efficacy for Long-Acting Local Anesthetic >5 days 2% 4 days 9% ≤ 24 hours 12% 72 hours 11% ≤ 24 hours 44% 48 hours 27% 72 hours 46% Source: Decision Resources Post-Operative Pain Physician Research Initiative 2014 (N=30 qualitative interviews; N=184 quantitative survey) 21 48 hours 45% HTX-011’s Unique Combination of Bupivacaine & Meloxicam Produced Marked Analgesia Through 72 Hours1 Higher bar = Greater analgesia Percentage of Maximal Force (60 gm) Tolerated Pig Post-Operative Pain Model Saline Control Biochronomer Bupivacaine HTX-011 Bupivacaine Liposome Injectable Suspension (2) Biochronomer Meloxicam 100.0 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 0 1 3 1. Post-operative pain model in pigs from Castle et al, 2013 EPJ 2. Human dose of bupivacaine liposome with 40% smaller incision 22 (n=4 pigs in each arm) 5 Hours 24 48 72 96 120 Activity of HTX-011 Cannot Be Replicated By Systemic Administration of Meloxicam Along With ER Bupivacaine Pig Post-Operative Pain Model Saline Placebo HTX-011 (Bupivacaine + Meloxicam) Biochronomer Bupivacaine + Injectable Meloxicam* 100.0 90.0 Higher bar = Greater analgesia Percent of Maximum Force 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 0 *Same dose of meloxicam as in HTX-011 administered SQ Post-operative pain model in pigs from Castle et al, 2013 EPJ 23 (n=4 pigs in each arm) 1 3 5 24 Hours 48 72 96 120 HTX-011 Clinical Experience Shows It Has the Potential to Transform Post-Operative Pain Control • Phase 2 data has demonstrated: – Unprecedented statistically significant reductions in both pain and opioid use lasting up to 96 hours after surgery – Utility in both small procedures (bunion), medium size procedures (hernia), and one of the largest incisions (abdominoplasty) – Up to 10-fold synergy of HTX-011 compared to extended-release bupivacaine and >20-fold greater pain benefit through 72 hours than bupivacaine solution • During Phase 2 we optimized all the attributes of HTX-011 needed to have a successful Phase 3: √ the formulation, where the product has shown the versatility to be used in a wide variety of surgical procedures √ the dose, where the lowest highly effective dose has been chosen for Phase 3 √ the route of administration, where instillation, a faster, easier and potentially safer route of administration was demonstrated to be equally effective to standard injections 24 HTX-011 STUDY 203: Phase 2 Abdominoplasty 25 Study 203: Abdominoplasty Study Design & Demographics HTX-011 200mg Inj HTX-011 400mg Inj HTX-011 600mg Inj Saline Placebo Injection HTX-011 400 mg significantly reduced pain (SPI0-24 p=0.012); no additional benefit seen with 600mg Characteristic Parameter Saline Placebo HTX-011 400mg Age (Years) n 21 20 Mean 43.0 41.4 Minimum 29 27 Maximum 58 60 Male 0 (0) 0 (0) Female 21 (100) 20 (100) Caucasian 16 (76.2) 15 (75.0) African American 5 (23.8) 5 (25.0) Asian 0 (0) 0 (0) Other 0 (0) 0 (0) Hispanic 5 (23.8) 7 (35.0) Not Hispanic 16 (76.2) 13 (65.0) Gender n (%) Race n (%) HTX-011 400mg Instillation* Saline Placebo Instillation* *Drug products predominantly instilled with a small number of injections around the plication 26 Data from instillation, the optimal route of administration, presented Ethnicity n (%) HTX-011: Instillation Faster, Easier and Potentially Safer Compared to injection, instillation into the incision site is: • Easier to administer and less invasive, avoiding up to 50 or more injections into the skin with large operations • Safer, reducing the risk of venous puncture 27 Study 203: Mean Pain Intensity Scores* HTX-011 Is Significantly Better Than Placebo Through 96 Hours After Abdominoplasty HTX-011 400mg Instillation (n=20) 9 SPI48-72 p=0.038 SPI24-48 p=0.007 8 Saline Placebo (n=21) • Results confirm that HTX-011 can be successfully used in even the largest incisions SPI72-96 p=0.016 Mean Pain Index 7 SPI0-72 would likely be the Phase 3 endpoint 6 5 4 • 53 patients an arm should be sufficient to achieve p<0.05 for SPI0-24 3 2 SPI0-24 p=0.086 1 SPI0-48 p=0.018 SPI0-72 p=0.016 SPI0-96 p=0.010 0 0 6 12 18 24 30 36 42 48 54 60 66 72 Hours *LOCF method used to account for missing data, no adjustment for use of rescue medications 28 78 84 90 96 Study 203: HTX-011 Significantly Reduces Opioid Use 29 Mean Opioid Rescue Over Time Placebo (P) (n=21) HTX-011 400 mg (n=20) 0 – 24 hours 25.9mg 16.1mg p=0.014 0 – 48 hours 40.8mg 27.2mg p=0.021 0 – 72 hours 51.3mg 32.7mg p=0.011 0 – 96 hours 52.9mg 33.2mg p=0.011 HTX-011 produced significant reductions in opioid rescue medication through 96 hours after abdominoplasty Study 203: Treatment-Emergent Related Adverse Reactions for All Cohorts* Preferred Term Any Adverse Event Saline Placebo (n=84) 25.0% HTX-011 (n=68) 25.0% Nausea 7.1% 7.4% Vomiting 1.2% 2.9% Headache 3.6% 7.4% Dizziness 3.6% 0 Hypoesthesia 1.2% 2.9% Wound dehiscence 2.4% 1.5% Pruritus 8.3% 2.9% Hypotension 2.4% 4.4% Decreased appetite 0 2.9% *Adverse events considered at least possibly related with an incidence of >2% 30 HTX-011 STUDY 208: Phase 2 Bunionectomy 31 Study 208: Bunionectomy Study Design & Demographics HTX-011 200mg HTX-011 120mg Characteristic Age (Years) HTX-011 60mg Bupivacaine 50mg Gender n (%) Parameter Saline Bupivacaine HTX-011 200mg HTX-011 120mg HTX-011 60mg n 86 15 30 56 35 Mean 49.9 52.7 52 49.6 54.2 Minimum 21 36 20 24 24 Maximum 76 84 71 75 76 Male 12 (14.0) 2 (13.3) 5 (16.7)) 11 (19.6) 4 (11.4) Female 74 (86.0) 13 (86.7) 25 (83.3) 45 (80.4) 31 (88.6) Caucasian 50 (58.1) 8 (53.3) 24 (80.0) 38 (67.9) 21(60.0) African American 30 (34.9) 6 (40.0) 4 (13.3) 17 (30.4) 13 (37.1) Other 6 (7.0) 1 (6.7) 2 (6.7) 1 (1.8) 1 (2.9) Hispanic 21 (24.4) 2 (13.3) 5 (16.7) 18 (32.1) 7 (20.0) Not Hispanic 65 (75.6) 13 (86.7) 25 (83.3) 38 (67.9) 28 (80.0) Saline Placebo Race n (%) HTX-002 120mg HTX-009 120mg Ethnicity n (%) HTX-011 30mg on-going Open wound and closed wound injections combined 32 Study 208: Mean Pain Intensity Scores* HTX-011 Is Significantly Better Than Placebo For All Doses Tested 8 SPI24-48 200mg v B: p=0.0025 120mg v B: p=0.0169 60mg v B: p=0.170 7 Mean Pain Intensity 6 5 4 3 2 1 0 0 SPI0-24 200mg v P: p<0.0001 6 18 24 120mg v 12 P: p<0.0001 60mg v P: p<0.0001 HTX-011 200mg 33 SPI0-72 would likely be the Phase 3 endpoint SPI0-48 200mg v P: p<0.0001 120mg v P: p<0.0001 60mg v P: p=0.0063 30 36 HTX-011 120mg 42 SPI0-72 200mg v P: p<0.0001 120mg v P: p=0.0009 60mg v P: p=0.0353 48 54 60 66 SPI0-96 200mg v P: p<0.0001 120mg v P: p=0.0018 60mg v P: p=0.061 72 78 84 90 Hours HTX-011 60mg Bupivacaine 50mg *LOCF method used to account for missing data, no adjustment for use of rescue medications Saline Placebo 96 Study 208: Mean Pain Intensity Scores* HTX-011 Is Significantly Better Than Bupivacaine For All Doses Tested SPI24-48 200mg v P: p=0.0029 120mg v P: p=0.0201 60mg v P: p=0.127 8 7 60mg of bupivacaine combined with meloxicam in HTX-011 is significantly better than 50mg of bupivacaine solution through 48 hours Mean Pain Intensity 6 5 4 3 SPI0-48 SPI0-96 SPI0-72 200mg v B: p<0.0001 120mg v B: p=0.0009 200mg v B: p=0.0001 200mg v B: p=0.002 60mg v B: p=0.0206 120mg v B: p=0.0103 120mg v B: p=0.034 60mg v B: p=0.0849 60mg v B: p=0.196 2 1 0 SPI0-24 200mg v B: p<0.0001 0 6 12 18 24 120mg v B: p=0.0002 60mg v B: p=0.0031 HTX-011 200mg 30 36 HTX-011 120mg 42 48 54 60 66 78 84 90 Hours HTX-011 60mg Bupivacaine 50mg *LOCF method used to account for missing data, no adjustment for use of rescue medications 34 72 Saline Placebo 96 Bupivacaine 50 mg (n=25) 26-fold Greater Reduction in Pain 100 80 60 40 20 p=0.002 p=0.002 p=0.017 0 0 - 24 hr 35 HTX-011 60 mg (n=52) 120 AUC LSMD(−) vs Placebo Greater Pain Reduction vs Placebo HTX-011 60 mg Produces 26-Fold Greater Reduction in Pain Compared to Bupivacaine 50 mg Through 72 Hours 0 - 48 hr *p-values are from ANOVA using AUC0-72 of Pain Intensity with wWOCF for HTX-011 vs bupivacaine 0 - 72 hr Study 208: HTX-011 Significantly Reduces Opioid Use Mean Opioid Rescue Over Time 0 – 24 hours 0 – 48 hours 0 – 72 hours 0 – 96 hours 36 Placebo (P) (n=86) 16.5mg 26.6mg 33.2mg 33.8mg Bupivacaine Solution (B) (n=15) HTX-011 120 mg (n=56) HTX-011 60 mg (n=35) 16.3mg 8.0mg p<0.0001 v P p=0.0008 v B 8.2mg p<0.0001 v P p=0.002 v B 28.6mg 17.8mg p=0.0008 v P p=0.0117 v B 15.2mg p=0.0009 v P p=0.0103 v B 35.8mg 23.8mg p=0.0122 v P p=0.0457 v B 20.5mg p=0.0053 v P p=0.0226 v B 35.8mg 24.6mg p=0.0181 v P p=0.0727 v B 20.7mg p=0.005 v P p=0.0255 v B Doses down to 60mg HTX-011 produced significant reductions in opioid rescue medication and significant increases in median time to first opioid (increased by 300%) and the percent of opioid-free patients through 96 hours (increased by 240%) Study 208: Treatment-Emergent Related Adverse Reactions for All Cohorts* Preferred Term Saline Placebo (n=86) Bupivacaine (n=15) HTX-011 (n=121) Any Adverse Event 20.9% 20.0% 27.3% Nausea 9.3% 13.3% 14.0% Vomiting 11.6% 6.7% 3.3% Erythema 1.2% 0 5.0% Headache 1.2% 0 5.8% Swelling 0 0 2.5% *Adverse events considered at least possibly related with an incidence of >2% 37 HTX-011 STUDY 202: Phase 2 Hernia Repair Data Presented at 2016 Pain Week 38 HTX-011 Study 202: Herniorrhaphy Study Design Injection HTX-011 200mg Part B Instillation Injection HTX-011 400mg Instillation Saline 39 Injection Instillation and Injection Reduced Pain Equally Well 140 121.6 120 Mean SPI0-24 100 86.2 85.2 HTX-011B 400mg Injection (N=14) HTX-011B 400mg Instillation (N=16) 80 60 40 20 0 40 Saline Placebo (N=31) Study 202: Mean Pain Intensity Scores HTX-011 400mg Significantly Better than Placebo Through 48 hours 8 SPI24-48 p=0.138 7 Mean Pain Intensity 6 5 4 3 2 1 SPI0-24 p=0.0035 0 0 6 12 SPI0-48 p=0.025 18 24 HTX-011 200mg 41 30 36 SPI0-72 p=0.082 42 HTX-011 400mg *LOCF method used to account for missing data, no adjustment for use of rescue medications P-values are for the 400 mg dose 48 54 Saline Placebo 60 66 72 Study 202: Opioid Use Substantially Reduced Consistent with the significant reductions in pain observed with HTX-011, opiate use was also reduced: • Percent of patients who required no opioid rescue medication for the 96 hour study period substantially increased (24.1% versus 6.5%) • Mean total opioid consumption decreased by 22.4% through 96 hours post-surgery 42 Summary of Treatment-Emergent Adverse Events (TEAEs) in Study 202* Preferred Term HTX-011B 200 mg (N=31) HTX-011B 400 mg (N=30) Saline Placebo (N=31) 12 (38.7%) 10 (33.3%) 16 (51.6%) Nausea 2 (6.5%) 5 (16.7%) 4 (12.9%) Headache 3 (9.7%) 3 (10.0%) 0 Constipation 3 (9.7%) 1 (3.3%) 5 (16.1%) 0 0 2 (6.5%) Any TEAE >1 TEAE in any treatment arm Hypersensitivity 43 SYNERGY BETWEEN BUPIVACAINE AND MELOXICAM HAS BEEN CONFIRMED IN TWO PAIN CLINICAL MODELS HTX-011 SIGNIFICANTLY BETTER THAN EITHER COMPONENT ALONE 44 HTX-011 Has Demonstrated Significantly Greater Pain Reduction Than Either Bupivacaine or Meloxicam Alone Comparison of AUC0-72 HTX-002 (Bupivacaine) HTX-009 (Meloxicam) HTX-002 + HTX-009 HTX-011 (Bupivacaine + Meloxicam) ~7-fold Synergy AUC LSMD(-) vs Placebo 140 120 100 ~9-fold Synergy 80 60 40 20 p=0.043 p=0.002 p=0.035 p=0.034 0 -20 -40 Bunion (120 mg) 45 *p-values are from ANOVA using AUC0-72 of Pain Intensity with wWOCF Hernia (200 mg) No Extended Release Bupivacaine Has Demonstrated a PK– PD Relationship EXPAREL® (ER Bupivacaine) HTX-002 (ER Bupivacaine) • • No PK-PD Relationship 3 No PK-PD Relationship 140 ∆ Pain Score Plasma Conc 80 1.5 60 1 40 0.5 20 0 0 0 24 48 72 Hours PK – PD data from Exparel® Bunionectomy Study; Golf, et. al. 46 Δ Pain Score (Saline – HTX-002) ∆ Pain Score (Saline minus Exparel) 100 2 Plasma Bupivacaine (ng/mL) 120 2.5 Unique Combination of Bupivacaine & Meloxicam Demonstrates Clear PK–PD Relationship • For the first time an extended release local anesthetic has shown a clinical PK – PD relationship Study 208 Similar PK – PD relationship observed with HTX-011 in Study 202 Hernia Repair 47 PHASE 2 STUDIES IN TKA AND NERVE BLOCK HAVE STARTED 48 Study 209: Total Knee Arthroplasty Study Design (n=120) Saline Placebo Injection Bupivacaine 150 mg Injection 49 HTX-011 400 mg Instillation ± Injection Cohort 2 Cohort 1 HTX-011 200 mg Instillation ± Injection Saline Placebo Injection Bupivacaine 150 mg Injection Study 211: Pectoral Pocket Nerve Block in Breast Augmentation Study Design (n=72) Saline Placebo Nerve Block Bupivacaine 50 mg Nerve Block 50 HTX-011 60 to 120 mg Nerve Block Cohort 2 Cohort 1 HTX-011 60 mg Nerve Block Saline Placebo Nerve Block Bupivacaine 50 mg Nerve Block HTX-011 Shows Durable Response in Sciatic Nerve Block Model in Pigs Saline Bupivacaine 25 mg Exparel 106 mg HTX-011 100 mg 300 Force in Grams 250 200 150 100 50 0 0.5H 51 1H 2H 4H 6H 8H HOURS 9H 10H 24H 28H 48H Summary: HTX-011 Is Poised to Fulfill the Promise of Long-Acting Local Anesthetics in Post-Op Pain 52 Large, growing market opportunity Differentiated, synergistic mechanism addresses inflammation – a key inhibitor of both generic and long-acting local anesthetics Demonstrated superiority vs. generic bupivacaine solution supports value story Consistent 72-hour efficacy - Pain reduction - Opioid reduction Applicable in large and small procedures without admixture with bupivacaine solution – reducing chance of dosing errors and systemic toxicity Flexible administration with potential safety advantages Potential to address most pressing unmet needs cited by key stakeholders – patients, surgeons, anesthesiologists & formulary decision makers De-risked Phase 3 development program and extensive patent protection through 2035 Key Catalysts in Pain & CINV Franchises HTX-011 for Post-Operative Pain Early Q1 Top-line abdominoplasty data Early Q1 Phase 2 program in nerve block initiated Initiated TKA study (local administration) End-of-Phase 2 (scheduled) Initiation of Phase 3 studies NDA filing 2018 53 CINVANTI™ (HTX-019) for CINV Q1 (Jan.) – NDA submission Q4 – PDUFA goal date of 11/12/17 SUSTOL® for CINV 2017 net sales guidance: $15M - $25M Financial Update (May 10, 2017) • Current cash, cash equivalents and short-term investments are sufficient for at least one year. Summary Statement of Operations (In thousands, except per share data) Net product sales $ 3,632 Operating expenses1 52,931 Other expenses, net (1,030) Net loss1 $ (50,329) Net loss per share2 $ Condensed Balance Sheet Data (In thousands) 54 Three Months Ended March 31, 2017 (1.00) March 31, 2017 Cash, cash equivalents and short-term investments 3 $ 165,216 Total assets $ 189,558 Promissory note payable $ Total stockholders’ equity $ 102,160 1 Includes $8.0 million of non-cash, stock-based compensation expense. 2 Based on 50.5 million weighted-average common shares outstanding for the three months ended March 31, 2017. 3 First quarter 2017 net cash used in operations totaled $50.6 million and included $14 million related to changes in accounts receivable, accounts payable and accrued expenses. Net cash used in operations expected to be less over remaining quarters of 2017. 50,000