Antares Pharma Inc (ATRS) and AcelRx Pharmaceuticals Inc (ACRX) Fail to Meet FDA Threshold; Analysts Weigh In

The complete response letter: Antares and AcelRx have just gotten the kind of mail no one wants to receive.


Antares Pharma Investors Scratching Their Heads

It’s a rough trading day for Antares Pharma Inc (NASDAQ:ATRS) investors, with shares falling over 40%, making the stock Wall Street’s bear of the day. The reason? The drug maker announced that it has received a letter from the FDA stating that, as part of their ongoing review of the Company’s New Drug Application (NDA) for XYOSTED, they have identified deficiencies that preclude the continuation of the discussion of labeling and postmarketing requirements/commitments at this time.

Xyosted, which was previously known as QuickShot Testosterone, is being developed as testosterone replacement therapy. Xyosted is designed to be injected at home, on a weekly basis by men who have been diagnosed with hypogonadism, a condition where the body does not produce enough testosterone.

“Xyosted unspecified issues are a head scratcher, but sumof-parts without it still worth well above current levels,” says H.C. Wainwright analyst Oren Livnat. “This is not a typical scenario, and we and the company remain at a loss for what specifically could trip the filing up at this juncture. Antares expects to learn more from FDA in the coming days. We aren’t yet in a position to draw any conclusions and will wait for more information before altering our forecasts.”

“We highlight that our sum-of-the-parts valuation still yields $3.3/share even if we entirely eliminate Xyosted from our model (which it is much too soon to do; this could be a minor delay). Recall that Antares already has approximately $45M annual revenue with the current base business, excluding the just divested Zomajet, plus several other irons in the fire near term. Also, worst case, if Xyosted were entirely dead, that would actually improve Antares’ near-term liquidity position since the launch would be cash-flow negative through mid-2019, by our estimates,” the analyst continued.

As such, Livnat reiterates a Buy rating on Antares Pharma shares, with a price target of $5.00, which implies an upside of 128% from current levels. (To watch Livnat’s track record, click here)

Where does the rest of the Street side on this volatile biotech player? It appears bullish, as TipRanks analytics demonstrate ATRS as a Buy. As of this writing, all the 4 analysts polled in the last 12 months are bullish on Antares stock. With a return potential of 120%, the stock’s consensus target price stands at $4.83.

AcelRx Pharmaceuticals: Calm After The Storm?

AcelRx Pharmaceuticals Inc (NASDAQ:ACRX) stock is stabilizing as the market digests yesterday’s FDA setback. As a reminder, the drug maker announced receipt of a CRL for its acute pain treatment Dsuvia. The FDA requested additional data on 50 patients at the highest proposed dose as well as a human factor study to validate new directions for use, sending ACRX shares crashing 60%.

In reaction, Roth Capital analyst Michael Higgins slashes his price target for ACRX from $12.50 to $7.50, while reiterating a Buy rating on the stock. (To watch Higgins’ track record, click here)

Higgins comments, “It appears the agency did not communicate with AcelRx management, as the latter was very surprised with the results. Not to negotiate for the company, but we believe it can and will succeed in gaining Dsuvia’s approval by limiting the number of doses/day. We speculate it could be up to 10/day. Regardless of labeling, we are unlikely to change our assumption on the number of pills/day.”

Overall, Wall Street is torn when it comes to whether to sing this biotech firm’s praises or assess with an apprehensive gaze, as according to TipRanks, out of 6 analysts polled in the last 3 months, half are bullish on AcelRx stock while half remain sidelined. However, with an upside potential of 175%, the stock’s consensus target price stands at $5.88.

  • Thomas Kruzick

    Stunned that ATRS did not see this coming. Someone should have to answer. FDA should not have waited this long. Their reasoning best be sound.