AcelRx Pharmaceuticals Inc (NASDAQ:ACRX), a specialty pharmaceutical company focused on the development and commercialization of innovative therapies for the treatment of acute and breakthrough pain, today announced the monetization of the expected royalty stream from the sales of Zalviso™ (sufentanil sublingual tablet system) in the European Union by its commercial partnerGrunenthal GmbH. Gross proceeds from the sale are $65 million from PDL BioPharma (NASDAQ: PDLI). Specifically, PDL will receive 75% of the European royalties under the Grunenthal license as well as 80% of the first four commercial milestones, subject to a capped amount. AcelRx will receive 25% of the royalties, 20% of the first four commercial milestones, 100% of the remaining commercial milestones and all development milestones, including a potential $15 million payment for the approval of the Zalviso MAA. The proceeds from the transaction will provide AcelRx with additional operating capital, which will be used for general corporate purposes, including regulatory activities associated with ARX-04 and Zalviso.
Timothy E. Morris, chief financial officer of AcelRx Pharmaceuticals, commented, “This transaction provides AcelRx with significant capital in a non-dilutive manner. It will increase our estimated cash at year end to over $100 millionand should provide sufficient capital to complete regulatory submissions for ARX-04 in the U.S. and Europe, and to conduct limited additional work on Zalviso, if needed, in preparation for re-submitting a New Drug Application to theU.S. Food and Drug Administration.”
The transaction will be treated as a sale for tax purposes. AcelRx has established a wholly owned subsidiary, ARPI LLC, to facilitate the transaction. Credit Suisse acted as sole structuring and financial advisor to AcelRx in connection with the transaction. AcelRx was represented by Cooley LLP, PDL by Gibson, Dunn & Crutcher LLP and Credit Suisseby Cadwalader, Wickersham & Taft LLP.
Separately, concurrently with the closing of the royalty monetization, AcelRx amended its existing credit facility withHercules Technology Growth Capital, Inc. (NYSE: HTGC), which includes an interest only period from October 1, 2015 through March 31, 2016 (with the potential for further extension to September 30, 2016 upon satisfaction of certain conditions). Loans under the credit facility will mature on October 31, 2017. In connection with the amendment, AcelRx reduced the exercise price of warrants previously issued to Hercules in connection with the credit facility. (Original Source)
Shares of Acelrx Pharmaceuticals closed last Friday at $3.97. ACRX has a 1-year high of $9.32 and a 1-year low of $2.96. The stock’s 50-day moving average is $4.21 and its 200-day moving average is $4.13.
On the ratings front, Acelrx Pharmaceuticals has been the subject of a number of recent research reports. In a report issued on September 14, H.C. Wainwright analyst Ed Arce reiterated a Buy rating on ACRX, with a price target of $8.50, which represents a potential upside of 114.1% from where the stock is currently trading. Separately, on September 9, Roth Capital’s Michael Higgins reiterated a Buy rating on the stock and has a price target of $7.50.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Ed Arce and Michael Higgins have a total average return of 33.2% and 20.1% respectively. Arce has a success rate of 46.7% and is ranked #85 out of 3765 analysts, while Higgins has a success rate of 59.1% and is ranked #536.
AcelRx Pharmaceuticals Inc is a specialty pharmaceutical company. The Company is engaged in thedevelopment and commercialization of therapies for the treatment of acute pain.