Company Update (NASDAQ:ACRX): AcelRx Pharmaceuticals Inc Provides Business Update and Reports Second Quarter and Six Months 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 pain, today provided a business update and reported financial results for the three and six months ended June 30, 2015.

Business highlights include:

  • On July 23, 2015, the Committee for Medicinal Products for Human Use (CHMP) adopted a positive opinion for Zalviso™ for the management of acute moderate-to-severe post-operative pain in adult patients in a hospital setting. A decision by the European Commission (EC) on the approval of Zalviso is anticipated in late September or early October.
  • AcelRx has been granted a General Advice meeting with the U.S. Food and Drug Administration (FDA) in early September to discuss the FDA’s request for a clinical trial and the company’s planned response to the Complete Response Letter (CRL) issued by the FDA for the New Drug Application (NDA) for Zalviso.
  • SAP301, a pivotal Phase 3 study of ARX-04 (sufentanil sublingual tablet, 30 mcg), is fully enrolled. Top-line data from this study is anticipated early in the fourth quarter of 2015.

“The positive opinion and recommendation for approval of Zalviso by the CHMP is an important step towards approval by the EC. In the U.S., we have a meeting scheduled with the FDA to work towards determining a regulatory path forward,” commented Howie Rosen, interim chief executive officer of AcelRx. “Lastly, we look forward to the top-line data from the SAP301 Phase 3 study of ARX-04. ARX-04 represents a significant opportunity for AcelRx and has the potential to be the first sublingual, high-potency opioid for use in non-opioid tolerant patients.”

Second Quarter Financial Results

Net loss for the second quarter of 2015 was $8.9 million, or $0.20 basic and diluted net loss per share, compared to a net loss of $10.6 million, or $0.24 basic net loss per share and $0.30 diluted net loss per share for the second quarter of 2014. The decrease in the net loss and net loss per share was primarily due to revenue generated under AcelRx’s contract with the Department of Defense (DoD) for ARX-04 development, and decreased general and administrative expenses as a result of the cost reduction plan implemented at the end of March 2015, partially offset by having no other income in the second quarter of 2015, as compared to $2.2 million recognized in the second quarter of 2014. Common shares used in calculating earnings per share were 44.3 million for basic and diluted EPS in the second quarter of 2015, compared to 43.3 million for basic EPS and 44.3 million for diluted EPS in the second quarter of 2014.

For the second quarter 2015, AcelRx recognized $1.4 million in revenue related to the DoD contract signed in May 2015 and $486,000 of previously deferred revenue under the collaboration agreement with Grunenthal, as compared to $71,000 of previously deferred revenue related to the Grunenthal agreement for the quarter endedJune 30, 2014.

Research and development expenses for the quarter ended June 30, 2015 were $7.3 million, compared to $7.3 million for the quarter ended June 30, 2014. Research and development expenses during the three months endedJune 30, 2015, as compared to the three months ended June 30, 2014, included a $2.5 million reduction in Zalviso development program expenses, offset by a $2.0 million increase related to SAP301, a pivotal Phase 3 clinical study for ARX-04, and a $0.5 million increase in research and development overhead expenses, including a $0.4 millionincrease in facilities expense, primarily related to the amortization of the tenant improvements at our contract manufacturer’s facility and depreciation of manufacturing equipment.

General and administrative expenses were $2.7 million for the second quarter of 2015, compared with $5.0 millionfor the second quarter of 2014. The decrease was primarily due to a $2.3 million reduction in market research expenses and a significant reduction in pre-commercialization activities related to Zalviso.

Other income and expense included $2.5 million in non-cash income in the second quarter of 2014 resulting from the liability accounting related to the PIPE warrants, which are considered a liability for accounting purposes and remeasured at the end of each reporting period utilizing the Black-Scholes valuation model. As of June 30, 2015, there were approximately 0.5 million PIPE warrants outstanding.

Year-to-Date Financial Results

For the six months ended June 30, 2015, AcelRx reported a net loss of $18.9 million, or $0.43 basic net loss per share and $0.47 diluted net loss per share, compared to $20.2 million, or $0.47 basic net loss per share and $0.50diluted net loss per share for the same period in 2014. Common shares used in calculating earnings per share were 44.1 million for basic EPS and 44.4 million for diluted EPS in the six months ended June 30, 2015, compared to 43.3 million for basic EPS and 43.8 million for diluted EPS in the six months ended June 30, 2014.

As mentioned above, AcelRx recognized $1.4 million in revenue related to the DoD contract in the six months endedJune 30, 2015. In addition, in the six months ended June 30, 2015, AcelRx recognized $667,000 of previously deferred revenue under the collaboration agreement with Grunenthal, as compared to $166,000 in the six months ended June 30, 2014.

Research and development expenses in the six months ended June 30, 2015 were $13.6 million, compared to$12.0 million in the six months ended June 30, 2014. The increase was primarily attributable to a $2.5 millionincrease related to the ARX-04 development program, a $0.8 million increase in manufacturing facilities expense, and an increase of $0.9 million in personnel-related expenses, including stock-based compensation, partially offset by a $2.5 million decrease related to the Zalviso Phase 3 clinical program.

General and administrative expenses were $7.3 million in the six months ended June 30, 2015, compared to $9.0 million in the six months ended June 30, 2014. The decrease was a result of a $3.0 million decrease in market research and outside services, primarily related to market research activities for Zalviso, partially offset by an increase of $1.3 million, primarily due to a $1.2 million increase in headcount-related expenses, including a $0.5 million increase in stock-based compensation.

Other income and expense includes $2.1 million and $1.8 million in non-cash income in the six months ended June 30, 2015 and 2014, respectively, resulting from the liability accounting related to the PIPE warrants.

As of June 30, 2015, AcelRx had cash, cash equivalents and investments of $51.2 million, compared to $75.4 million at December 31, 2014. The net decrease in cash, cash equivalents and investments was $24.2 million for the six months ended June 30, 2015, $13.3 million for the second quarter 2015 and $10.9 million for the first quarter 2015. In the second quarter of 2015, AcelRx began making principal payments on its outstanding debt with Hercules, which payments totaled $2.2 million.

“The decrease in cash in the second quarter of 2015 was higher than the first quarter of 2015 mainly due to principal payments made under the line of credit with Hercules,” stated Tim Morris, chief financial officer of AcelRx Pharmaceuticals. “Assuming receipt of the $15 million milestone from Grunenthal for approval of Zalviso in the EU, which is currently anticipated to be received in the fourth quarter of this year, and revenues earned under the DoD contract for ARX-04, we anticipate our cash balance at the end of the year to be approximately $45 million.”  (Original Source)

Shares of Acelrx Pharmaceuticals closed today at $4.05, $0.07 or 1.7%. ACRX has a 1-year high of $9.32 and a 1-year low of $2.96. The stock’s 50-day moving average is $4.13 and its 200-day moving average is $4.92.

On the ratings front, Acelrx has been the subject of a number of recent research reports. In a report issued on July 24, Roth Capital analyst Michael Higgins reiterated a Buy rating on ACRX, with a price target of $7.50, which implies an upside of 82.0% from current levels. Separately, on May 6, Mizuho’s Mario Corso reiterated a Hold rating on the stock and has a price target of $3.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Michael Higgins and Mario Corso have a total average return of -0.7% and 25.5% respectively. Higgins has a success rate of 35.7% and is ranked #2752 out of 3724 analysts, while Corso has a success rate of 66.7% and is ranked #212.

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