This Analyst Cheers for AcelRx (ACRX), the Little Opioid Company that Could

Drug company AcelRx (ACRX) is likely celebrating its first win after getting news from the Food and Drug Administration (FDA) late Friday afternoon that its opioid pain drug DSUVIA is close to being cleared. Specifically, the FDA’s advisory committee voted a strong Yes, with a clear majority (10 to 3) voting to recommend DSUVIA for approval. The FDA is scheduled to make its final decision on or before November 3rd.

H.C. Wainwright Analyst Ed Arce is gung-ho over the company’s potential for success, reiterating a Buy rating on ACRX, while boosting the price target from $7.00 to $8.00 ahead of the upcoming FDA decision and potential Q119 launch. (To watch Arce’s track record, click here)

“As a result of Friday’s positive AdCom vote, and our subsequent discussion with management, we make the following updates to our model: (1) Increase DSUVIA POS in the U.S. to 95%, from 85% previously; (2) Reduce discount rate 50 bps to 13.0%, from 13.5% previously; (3) Roll forward base year for discounting to 2019; (4) Increase assumed price of DSUVIA to $50, from $40 previously, to reflect the low-end of current pricing guidance of $50-60 per 30 mcg dose; and (5) Moderate DSUVIA sales projections in 2019 and 2020 to reflect modest growth expected during initial phase of hospital and ASC formulary adoption and physician uptake,” Arce said.

Arce believes that though the company had to make some changes to the way the drug was administered as well as the dosage, net sales would not be affected too much.

“Specifically, the FDA proposes detailed requirements for each medically supervised healthcare setting to become certified (manage potential overdose, staff training, processes and procedures of administration) to dispense DSUVIA. Lastly, we note that the one material change, for patients, to the current NDA from the original application is the reduction in the maximum daily dose to 12, from 24 previously […] AcelRx demonstrates that in pivotal Study 301, 92% of patients required 12 doses or less of DSUVIA over 24 hours, which we believe renders the impact to net sales from this change as negligible,” Arce stated.

Net net, the word of the Street is an overwhelmingly bullish one for this biotech stock, as TipRanks analytics exhibit ACRX as a Strong Buy. Out of 5 analysts polled in the last 3 months, 4 are bullish on AcelRx stock. With a return potential of nearly 94%, the stock’s consensus target price stands at $7.75.


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