AcelRx Pharmaceuticals Inc (NASDAQ:ACRX) investors are quaking today in the upshot of earnings not so far off the mark from second quarter expectations. What then is the issue that is sending shares diving almost 14% today?

The firm’s drug Zalviso, approved in the EU to treat moderate-to-severe acute pain in a hospital setting released top-line results following the Complete Response Letter (CRL) it received in its Phase 3 trial, IAP312. True, the trial met statistical significance of device functionality over 72 hours, with merely 7 out of a pool of 320 patients noting a device error, but seven “misplaced” tablets were found by nurses among 6 of these patients. Under the protocol of the study, nurses were required to check every two hours for wayward pills.

Roth Capital Michael Higgins believes this does not bode well for ACRX even in the wake of EU post-approval, concerned that 14 months following the FDA issuing its CRL, “[…] the FDA’s heightened sensitivity to the opioid crisis is likely to prevent Zalviso’s approval.” In fact, Higgings anticipates “today’s FDA may have a problem” here, and asserts that this “overshadowed” earnings.

Therefore, sizing up the buying opportunity for the stock by placing “focus […] squarely on Dsuvia,” the firm’s other acute pain drug candidate, the analyst reiterates a Buy rating on ACRX while lowering the price target to $12.50, which represents a 328% increase from current levels.

“With FDA skating on thin ice, in our view, we believe Zalviso’s NDA as too heavy for the agency to bear,” contends Higgins, elaborating, “In our modeling we have dropped our probability of Zalviso’s U.S. approval from 25% to 0%. We suspect the FDA will review Study IAP312 (4Q’17 NDA filing, six month review) with the uneasy awareness that anyone at any age can discover sufentanil NanoTabs in the post-op patients’ bed sheets or on the floor. While the rate is very low (0.1% of dispensed tablets), we have not found any.”

“We believe Zalviso’s 2015 CRL has been anchoring a cloud over ACRX shares, as investor attention on Dsuvia has been slow to develop,” surmises the analyst. Moving forward, Dsuvia’s PDUFA is set for October 12th.

TipRanks analytics indicate ACRX as a Buy. Based on 5 analysts polled by TipRanks in the last 3 months, 3 rate a Buy on AcelRX stock while 2 maintain a Hold. The 12-month average price target stands at $8.00, marking a 135% upside from where the stock is currently trading.