Acelrx (ACRX) Stock Is Firing on All Cylinders; Cantor Boosts Price Target

Acelrx’s (ACRX) shares popped over 20% in pre-market trading Monday, following indications that the U.S. Food and Drug Administration (FDA) will likely approve the company’s opioid pain drug Dsuvia. Specifically, investors were pleased that an FDA advisory committee meeting voted unanimously to recommend approval of the drug, noting that the benefits of Dsuvia seemed to outweigh the risks. While the FDA is not required to follow the guidance of the AdComm, it typically does.

In reaction, Cantor analyst Brandon Folkes reiterates an Overweight rating on ACRX, while boosting his price target to $8.00 (from $6.00), which implies an upside of nearly 65% from current levels. (To watch Folkes’ track record, click here)

Folkes commented, “We believe the positive AdCom vote on Friday validates the company’s ability to adequately address the concerns raised in those CRLs and to gain approval for its products. We now assume Dsuvia will gain approval next month and will reach peak sales in excess of $300MM by 2026. We believe Dsuvia offers an advancement in the treatment of acute pain in a medically supervised setting, and thus expect the company to invest in educating healthcare professionals about Dsuvia, resulting in a measured uptake of Dsuvia, which, over time, should capture significant market share and generate a durable revenue stream for ACRX, if priced accordingly.”

The analyst continued, “In our new price target, we include 2026E peak Dsuvia revenue in excess of $300MM. We believe our Dsuvia peak sales revenue forecast remains conservative, with upside revisions likely. In addition, if ACRX gains approval for Zalviso, this could represent further upside to our total revenue estimate. We believe ACRX is likely to resubmit Zalviso in 2018 or early 2019, and may include real world patient data of over 30,000 exposures to Zalviso in Europe to support its U.S. filing. Dsuvia remains the main value driver in our model and the focus for the company.”

Folkes is not the only fan of the biotech player on Wall Street, as TipRanks analytics exhibit ACRX as a Strong Buy. Based on 5 analysts polled in the last 3 months, 4 rate a Buy on Acelrx stock while 1 maintains a Hold. The 12-month average price target stands at $7.50, marking a 21% upside from where the stock is currently trading. (See ACRX’s price targets and analyst ratings on TipRanks)


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