Will the FDA grant its key blessing to AcelRx Pharmaceuticals Inc (NASDAQ:ACRX) come October 12th for its lead acute pain reliever drug candidate, Dsuvia? Only time is the truth teller of all, and it surely matters whose opinion you implore. Particularly when gauging Dsuvia’s chances at approval, there is a question mark hanging in the air after the drug candidate’s Advisory Committee was abruptly canceled. Does this cast a bad omen on Dsuvia’s agency approval prospects?
From where Jefferies analyst Matthew Andrews assesses the biotech firm, Dsuvia stands as “An Acute-ly Promising Pain Drug Likely to Pass Regulatory Scrutiny,” with high probability for both domestic as well as European approval waiting in the wings.
As such, the analyst finds the Street to be underestimating the compelling buying opportunity at hand for the biotech firm, assuming a Buy rating on shares of ACRX with a $7 price target, which represents a just under 91% increase from where the stock is currently trading. (To watch Andrews’ track record, click here)
However, not all on the Street would read the agency’s AdCom cancellation from such bullish light. Blogger Adam Feuerstein of TheStreet.com, who read the writing on the wall when the FDA cleared from its slate the panel meeting for hepatitis B vaccine Heplisav from Dynavax.
Feuerstein uncovered a bearish formula at stake: most times when a scheduled AdCom meeting gets scratched, the ruling that follows from the agency is to pan the drug under review. In other words, “This FDA pattern, seen over the past 10 years, could spell trouble […]”
As it turns out, “… someone could look back to find all the instances where FDA cancelled previously scheduled advisory panel meetings, then check to see if the drug involved was approved or rejected. That might give you some additional insight into what will happen,” argued the blogger.
When looking to an investor source for answers, Feuerstein discovered, “This investor looked as far back as 2008-2009 and found 15 instances where the FDA cancelled a previously scheduled advisory panel meeting. In 13 of those 15 examples, the FDA later rejected the drug on that review cycle.”
True, Feuerstein noted each drug review is a different apple falling from the tree, opining, “To be absolutely clear, none of this guarantees an FDA rejection of Heplisav on or before the Dec. 15 decision date. Every drug review is different and Dynavax may have answered the FDA’s outstanding questions sufficiently to allow for the vaccine’s approval.” However, the blogger’s prediction did not stray from reality, unraveling the looming risk to be the real deal at play.
Certainly if an investor were to ask Feuerstein, for the short-term, things are not looking so hot for Dsuvia.
TipRanks analytics show ACRX as a Buy. Out of 5 analysts polled by TipRanks in the last 3 months, 3 are bullish on AcelRX stock while 2 remain sidelined. With a return potential of 119%, the stock’s consensus target price stands at $8.00.