Heron Therapeutics Inc (Nasdaq: HRTX), a US-based commercial-stage biotechnology company, announced on Friday that its board of directors has adopted a Section 382 rights plan designed to protect the availability and significant potential value of the company's net operating loss carry-forwards (NOLs) and other tax attributes, which may be used to offset future taxable income.

The company says that the board unanimously approved the adoption of the Rights Plan. In addition, the Rights Plan satisfies the covenant to preserve the NOLs pursuant to the Company's Note Purchase Agreement with Rubric Capital Management dated 8 August 2025. The Rights Plan is effective August 14, 2025.

As of 31 December 2024, Heron had approximately USD1.37bn of U.S. federal NOLs, which may be available to offset future taxable income, and enhance cash flow as the company executes its growth strategy. However, the company's ability to use these NOLs would be substantially limited if it experienced an 'ownership change' under Section 382 of the Internal Revenue Code. The Rights Plan is intended to reduce the likelihood of such an event by deterring any single investor or group from acquiring beneficial ownership of 4.99% or more of Heron's outstanding common stock. The Rights Plan will expire one year from the effective date, unless earlier terminated or extended by the board.

Adam Morgan, board chairman, stated: "Adopting the Section 382 Rights Plan is intended solely to protect the significant potential value of the Company's NOLs, which we believe can offset pre-tax income as the Company executes its near-term and long-term organic and inorganic growth plan."

Details of the Rights Plan and the related rights will be contained in a Current Report on Form 8-K that the company will file with the Securities and Exchange Commission.