SCHEDULE: Rubric Capital Boosts Heron Therapeutics Stake to 15.9%
Schedule 13D Amendment
Rubric Capital Management LP and David Rosen increased their beneficial ownership in Heron Therapeutics, Inc. to 15.9% following the conversion of preferred stock and a convertible note issuance.
Summary
- Rubric Capital Management LP and David Rosen, as reporting persons, now beneficially own 30,046,828 shares of Heron Therapeutics, Inc. common stock.
- This represents 15.9% of the Issuer's outstanding common stock, based on 188,555,819 shares outstanding as of September 11, 2025, plus 5,241,410 shares from preferred stock conversion.
- On October 15, 2025, 94,610 shares of Preferred Stock beneficially owned by the Reporting Persons automatically converted into 946,100 Shares following Stockholder Approval.
- On August 8, 2025, a Rubric Fund entered into a Note Purchase Agreement with the Issuer, purchasing $35,000,000 aggregate principal amount of Notes for $33,250,000.
- The Notes have a maturity date of March 1, 2031, a 5% original issuance discount, and 5% per annum cash interest, with an option for 7% per annum interest payable in kind for the first twelve months.
- After December 31, 2025, the Notes are convertible at the holders' election at an initial rate of 555.5556 Shares per $1,000 principal amount, subject to adjustments.
- Conversions of the Notes can be settled at the Issuer's election in cash, shares, or a combination thereof.
Sentiment
Score: 7
Explanation: The filing indicates a significant capital infusion for the company through convertible notes and an increased stake by an institutional investor, which are generally positive developments for a publicly traded company, despite the discount on the notes and potential for PIK interest.
Positives
- The Issuer secured $33,250,000 in funding through the convertible note issuance, providing capital for operations.
- The conversion of preferred stock into common shares simplifies the capital structure for the Reporting Persons.
- A significant institutional investor, Rubric Capital Management LP, has increased its stake, potentially signaling confidence in the company's future.
Negatives
- The convertible notes were issued at a 5% original issuance discount, meaning the Issuer received less cash than the principal amount.
- The Issuer has the option to pay interest in kind (PIK) at 7% per annum for the first twelve months, which could lead to further dilution if exercised.
Future Outlook
After December 31, 2025, the convertible notes held by the Rubric Fund will be convertible into common shares at the election of the holders, at an initial rate of 555.5556 shares per $1,000 principal amount. The Issuer retains the flexibility to settle these conversions in cash, shares, or a combination thereof.
Industry Context
This filing primarily details a change in beneficial ownership and a capital raise through convertible notes for Heron Therapeutics, a biopharmaceutical company. While specific industry trends are not discussed, securing capital is a common activity for companies in the R&D-intensive biopharmaceutical sector, often through debt or equity instruments to fund clinical trials and product development.
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Stockholder Approval | Stockholder Approval was obtained, leading to the automatic conversion of preferred stock into common shares. | 2025-10-15 | This approval facilitated a pre-planned capital structure adjustment and conversion of a significant investor's preferred holdings. |
Related Party Transactions
- A Rubric Fund, associated with the Reporting Persons (Rubric Capital Management LP and David Rosen), entered into a Note Purchase Agreement with Heron Therapeutics, Inc. to purchase $35,000,000 in convertible notes.
Stakeholder Impact
- Shareholders: Potential future dilution from the conversion of the newly issued convertible notes and the previously converted preferred stock.
- Company: Enhanced liquidity and capital for operations due to the $33.25 million raised from the convertible note issuance.
Next Steps
- After December 31, 2025, holders of the convertible notes may elect to convert their notes into common shares of Heron Therapeutics.
Key Dates
| Date | Description |
|---|---|
| 2023-02-06 | Original Schedule 13D filed with the SEC. |
| 2025-08-08 | Rubric Fund entered into the Note Purchase Agreement with the Issuer. |
| 2025-09-09 | Issuer's Registration Statement on Form S-3 filed with the SEC, disclosing shares issued upon preferred stock conversion. |
| 2025-09-11 | Date as of which 183,314,409 shares were outstanding, as disclosed in the Issuer's Definitive Proxy Statement. |
| 2025-09-19 | Issuer's Definitive Proxy Statement on Schedule 14A filed with the SEC. |
| 2025-10-15 | Date of event requiring filing of this statement; Issuer filed Form 8-K disclosing Stockholder Approval and automatic conversion of Preferred Stock. |
| 2025-10-17 | Date of signing for Amendment No. 5 to Schedule 13D. |
| 2025-12-31 | After this date, the Notes become convertible at the election of the holders. |
| 2031-03-01 | Maturity date of the Convertible Notes. |
Keywords
Heron Therapeutics, Rubric Capital Management, Schedule 13D, Beneficial Ownership, Convertible Notes, Preferred Stock Conversion, Equity Stake, HTBX
Disclaimer:The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.