Stock Update (NASDAQ:ACRX): AcelRx Pharmaceuticals Inc Provides Zalviso Regulatory Update and Reports First Quarter 2015 Financial Results


AcelRx Pharmaceuticals Inc (NASDAQ:ACRX), a specialty pharmaceutical company focused on the development and commercialization of innovative therapies for the treatment of acute and breakthrough pain, today provided a regulatory update on Zalviso and reported financial results for the three months ended March 31, 2015.

Zalviso Regulatory Update

On April 21, 2015, AcelRx submitted a request to the Division of Anesthesia, Analgesia, and Addiction Products (DAAAP or the Division) of the Food and Drug Administration (FDA) for a Type B meeting. This past Friday the Division notified the Company that the request for a meeting was denied and restated the Division’s view that a clinical study is required. We are consulting with our regulatory, legal and clinical advisors to determine our next steps. We will be considering all options to determine a pathway forward for Zalviso including the possibility of dispute resolution through one of the FDA prescribed pathways as well as conducting additional clinical or Human Factors studies.

“As part of the Type B meeting, we intended to share with the Division the results of the bench testing and the Human Factors studies they had requested as part of the CRL and Type A meeting, and further discuss their desire for additional clinical work. We continue to believe that an additional clinical study should not be required to demonstrate the safety and efficacy of the Zalviso System beyond what has already been established in the Phase 3 clinical studies, as well as the bench testing and Human Factors studies,” stated Howie Rosen interim chief executive officer of AcelRx Pharmaceuticals. “We will provide a further update as to our next steps once we finalize our plan for moving forward towards gaining Zalviso approval in the U.S.”

First Quarter Financial Results

Net loss for the first quarter of 2015 was $10.0 million, or $0.23 basic net loss per share, and $0.27 diluted net loss per share, compared to a net loss of $9.6 million, or $0.22 basic and diluted net loss per share for the first quarter of 2014. The increase in the net loss and net loss per share was due primarily to higher headcount related expenses in the first quarter of 2015 as compared to the first quarter of 2014. The cost reduction plan implemented at the end of March 2015 reduced our workforce by approximately 36%. The associated termination and related costs are reflected as restructuring costs in the Statement of Comprehensive Loss. Common shares used in calculating earnings per share were 43.9 million for basic EPS and 44.4 million for diluted EPS for the first quarter of 2015, compared to 43.2 million for basic and diluted EPS for the first quarter of 2014.

For the quarter ended March 31, 2015, AcelRx recognized $181,000 of previously deferred revenue under the collaboration agreement with Grunenthal, as compared to $95,000 for the quarter ended March 31, 2014.

Research and development expenses for the quarter ended March 31, 2015 were $6.3 million, compared with $4.7 million for the quarter ended March 31, 2014. The increase was primarily due to increased medical affairs personnel, which positions were subsequently eliminated as part of the cost reduction plan, and the initiation of SAP-301, a pivotal Phase 3 clinical study for ARX-04, in the quarter ended March 31, 2015.

General and administrative expenses were $4.5 million for the first quarter of 2015, compared with $3.9 million for the first quarter of 2014. The increase was primarily due to increased commercial personnel in anticipation of potential FDA approval of Zalviso, which positions were subsequently eliminated as part of the cost reduction plan in the quarter ended March 31, 2015.

Other income and expense includes $2.2 million in non-cash income and $0.7 million in non-cash expense in the first quarter of 2015 and 2014, respectively, resulting from the liability accounting related to the warrants issued in connection with the PIPE financing completed in June 2012. These PIPE warrants are considered a liability for accounting purposes and they are remeasured at the end of each reporting period utilizing the Black-Scholes valuation model. As of March 31, 2015, there were approximately 0.5 million PIPE warrants outstanding.

As of March 31, 2015, AcelRx had cash, cash equivalents and investments of $64.4 million, compared to $75.4 million at December 31, 2014. The net decrease in cash, cash equivalents and investments was $11.0 million in the first quarter of 2015.

ARX-04 Update

In March 2015, AcelRx reported dosing of the first patient in a pivotal Phase 3 study of ARX-04, SAP-301, a multi-center, double-blind, placebo-controlled study that will evaluate the efficacy and safety of ARX-04 and placebo for the treatment of moderate-to-severe acute pain following ambulatory abdominal surgery. ARX-04 is a non-invasive, single-use 30 mcg sufentanil sublingual tablet in a disposable, pre-filled, single-dose applicator (SDA).

“During the first quarter of 2015 we implemented a plan to reduce operating costs and conserve capital,” commented Howie Rosen.  “For the remainder of 2015 we will focus our resources on moving Zalviso forward toward marketing approval in the U.S., continuing development of ARX-04 and supporting Grunenthal, our European partner for Zalviso.” (Original Source)

Shares of Acelrx Pharmaceuticals closed today at $4.20, up $0.17 or 4.22%. ACRX has a 1-year high of $11.65 and a 1-year low of $3.58. The stock’s 50-day moving average is $4.16 and its 200-day moving average is $6.20.

On the ratings front, Acelrx has been the subject of a number of recent research reports. In a report issued on March 10, Jefferies Co. analyst Biren Amin downgraded ACRX to Hold, with a price target of $6, which represents a potential upside of 48.1% from where the stock is currently trading. Separately, on March 9, Mizuho’s Mario Corso downgraded the stock to Hold and has a price target of $5.59.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Biren Amin and Mario Corso have a total average return of 16.4% and 25.5% respectively. Amin has a success rate of 57.1% and is ranked #324 out of 3590 analysts, while Corso has a success rate of 65.9% and is ranked #185.

AcelRx Pharmaceuticals Inc is a specialty pharmaceutical company. The Company is engaged in thedevelopment and commercialization of therapies for the treatment of acute pain.