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AcelRx Pharmaceuticals Reports First Quarter 2013 Financial Results



     AcelRx Pharmaceuticals Reports First Quarter 2013 Financial Results

PR Newswire

REDWOOD CITY, Calif., May 8, 2013

REDWOOD CITY, Calif., May 8, 2013 /PRNewswire/ -- AcelRx Pharmaceuticals, Inc.
(Nasdaq: ACRX), ("AcelRx"), a specialty pharmaceutical company focused on the
development and commercialization of innovative therapies for the treatment of
acute and breakthrough pain, today reported financial results for the first
quarter ended March 31, 2013.

"We continue to make progress in clinical development of our product
candidates.  We presented additional data at the recent American Society of
Regional Anesthesia and Pain Medicine meeting from a head-to-head study of the
Sufentanil NanoTab PCA System compared to intravenous morphine that showed
rapid post-operative pain reduction and low rates of oxygen desaturation for
the NanoTab system treated patients," stated Richard King, president and CEO
of AcelRx.  "This highly encouraging data reinforces our selection of
sufentanil, a fast-acting opioid with a high therapeutic index, to combine
with our pre-programmed, non-invasive patient-controlled delivery technology.
We also completed enrollment and look forward to announcing top-line results
later this quarter from our third and final Phase 3 trial conducted with the
NanoTab System in patients who have undergone hip or knee replacement
surgery."  Mr. King added, "We were also very pleased to announce positive
Phase 2 top-line results for ARX-04, a single-dose, sufentanil NanoTab product
candidate administered by healthcare professionals for the management of
moderate-to-severe acute pain, in which we successfully identified that a 30
mcg dose of sufentanil delivered no more frequently than hourly is an
effective dose."

First Quarter Financial Results

Net loss for the first quarter of 2013 was $12.8 million, or $0.34 per share,
compared with a net loss of $7.1 million, or $0.36 per share for the first
quarter of 2012.  Common shares used in calculating basic and diluted earnings
per share were 37,133,358 for the first quarter of 2013 compared to 19,607,483
for the first quarter of 2012.

During the first quarters of 2013 and 2012, AcelRx recognized revenue of
$940,000 and $329,000, respectively, resulting from reimbursement for work
completed under a research grant from the U.S. Army Medical Research and
Materiel Command, or USAMRMC, for development of ARX-04, a sufentanil NanoTab
product candidate for the treatment of moderate-to-severe acute pain in a
range of ambulatory environments.   

Research and development, or R&D, expenses for the quarter ended March 31,
2013 totaled $9.3 million, compared with $4.8 million for the quarter ended
March 31, 2012.  The increase was primarily due to expense associated with
Phase 3 clinical studies of the Sufentanil NanoTab PCA System, AcelRx's lead
product candidate for the treatment of post-operative pain, and Phase 2 study
expenses for the single-dose sufentanil NanoTab product candidate, ARX-04.  

General and administrative expenses were $2.2 million for the first quarter of
2013, compared with $2.1 million for the quarter ended March 31, 2012.  

Other income and expense includes a $1.8 million non-cash charge in the first
quarter of 2013 resulting from the liability accounting related to the
warrants issued in connection with the PIPE financing completed in June 2012. 
The primary determinant of this charge was an increase in stock price during
the first quarter of 2013 and its resulting impact on the Black-Scholes
valuation of these warrants.

As of March 31, 2013, AcelRx had cash, cash equivalents and investments of
$48.2 million, compared to $59.8 million at December 31, 2012.

Review of Recent Accomplishments and Corporate Update

  o On March 5, 2013, AcelRx announced positive top-line results from the
    first of two pivotal Phase 3 double-blind, placebo-controlled efficacy and
    safety clinical trials for the NanoTab System.   This trial involved 178
    adult patients recruited at 13 U.S. sites following major open abdominal
    surgery, and focused on the management of acute pain for up to 72 hours
    after the first study dose was given shortly after completion of surgery.
     The primary endpoint for this trial was the time weighted summed pain
    intensity difference to baseline over 48 hours, or SPID-48.  The top-line
    data demonstrated that patients receiving sufentanil NanoTabs realized a
    significantly greater SPID-48 (pain reduction) during the study period
    than placebo-treated patients (p=0.001).  Secondary endpoint data also
    showed that 24 and 72 hours after first dose, the SPID was significantly
    greater in the sufentanil-treated patients than in the placebo-treated
    patients (p<0.001 and p=0.004, respectively).  Sufentanil NanoTab
    treatment in this study was well tolerated, with the rate of adverse
    events being similar in both the active and placebo groups. Itching, a
    frequently observed side effect of opioids was the only adverse event that
    was significantly different between the two treatment arms, being seen
    more frequently in sufentanil-treated patients than placebo-treated
    patients.  Adverse events were generally mild-to-moderate in nature. 
  o During the first week of April 2013, AcelRx completed enrollment in a
    second and final Sufentanil NanoTab PCA System pivotal Phase 3 trial, with
    approximately 420 patients randomized 3:1 (active:placebo) in a 
    double-blind, placebo-controlled efficacy and safety clinical trial in
    adults immediately following major orthopedic surgery.  Top-line results
    should be available in the second quarter 2013.  The primary endpoint for
    the orthopedic Phase 3 study is SPID-48.  
  o On April 24, 2013, AcelRx announced positive top-line results in a Phase 2
    double-blind, placebo-controlled, dose-finding trial for ARX-04, a
    single-dose, sufentanil NanoTab product candidate for the management of
    acute pain in ambulatory settings.  The trial enrolled 101 patients
    following bunionectomy surgery, randomizing them into one of three groups
    (20 mcg or 30 mcg sufentanil NanoTab or placebo NanoTab), dosed no more
    frequently than once per hour.  The study achieved its objective in
    identifying the 30 mcg dose as the effective dose for sufentanil NanoTabs
    when dosed once per hour. Patients treated with 30 mcg sufentanil NanoTabs
    administered by a healthcare professional had significantly greater pain
    reduction than patients treated with placebo NanoTabs as measured by the
    summed pain intensity difference to baseline during the 12-hour study
    period (p=0.003).  Patients treated with 20 mcg sufentanil NanoTabs did
    not achieve statistically significant separation from placebo.  Adverse
    events were generally mild-to-moderate in nature, with two serious adverse
    events occurring, both being judged unrelated to study drug.  Two patients
    dropped out of the study due to adverse events, one deemed unrelated to
    study drug and the other considered probably related to study drug. The
    clinical study and associated research activities for ARX-04 are funded by
    a grant from USAMRMC.  
  o On May 2, 2013 AcelRx presented five posters on the Sufentanil NanoTab PCA
    System at the American Society of Regional Anesthesia and Pain Medicine
    (ASRA) annual meeting in Boston.  In one of these posters, new analyses
    from the Phase 3 trial comparing the NanoTab System to intravenous
    patient-controlled analgesia (IV PCA) with morphine demonstrated the
    NanoTab System had a significantly faster reduction in pain intensity
    compared to IV PCA morphine (p<0.01).  In addition, fewer patients
    experienced oxygen desaturation events below 95% in the NanoTab
    System-treated group than in the IV PCA morphine-treated group (p=0.028).
     Overall adverse events were similar between groups, and most were
    mild-to-moderate in nature in both groups.

Financial Outlook

AcelRx records as revenue the reimbursement received pursuant to the $5.6
million USAMRMC grant received in 2011.  To date, revenue from this grant has
been the only source of revenue recognized by AcelRx and we have recorded
revenues of $4.4 million through March 31, 2013. We expect the remaining $1.2
million to be recorded as revenue over the remaining life of the grant, which
terminates on January 31, 2014.

We anticipate that research and development expenses for the remaining
quarters of 2013 will be substantially lower than the $9.3 million reported
for the first quarter of 2013 due to lower clinical development expenses
associated with our NanoTab System and ARX-04 programs. These decreases in R&D
will be partially offset by the work involved in the preparation of a New Drug
Application for the Sufentanil NanoTab PCA System, expected to be submitted to
the FDA in third quarter of 2013.  Additionally, AcelRx anticipates modest
increases in 2013 in general and administrative expense due to costs
associated with commercial preparations for the launch of the NanoTab System
in the U.S. and expansion of its corporate infrastructure to support a
commercial launch.  Total operating expenses for 2013 are anticipated to be
modestly higher than they were in 2012.

Other income and expense in future periods is expected to include non-cash
charges that result from the liability accounting related to the warrants we
issued in connection with the PIPE financing completed in the second quarter
of 2012.  The primary determinant of this charge is stock price change over
each quarter and its impact on the Black-Scholes valuation of these warrants.
 For this reason the impact in future periods is very difficult to predict and
is not included in the Company's guidance.

AcelRx believes its current cash, cash equivalents and investments are
sufficient to fund operations into the third quarter of 2014.

Conference Call

AcelRx will conduct a conference call and webcast today, May 8, at 4:30 p.m.
Eastern Time (1:30 p.m. Pacific Time) to discuss its financial results and
program updates.  To listen to the conference call, dial in approximately ten
minutes before the scheduled call to (800) 860-2442 for domestic callers,
(866) 605-3852 for Canadian callers, or (412) 858-4600 for international
callers.  Those interested in listening to the conference call live via the
Internet may do so by visiting the Investors section of the company's website
at www.acelrx.com and selecting the Webcast link for the Q1 2013 earnings
conference call.  A webcast replay will be available on the AcelRx website for
90 days following the call by visiting the Investors section of the company's
website at www.acelrx.com.

About AcelRx Pharmaceuticals, Inc.

AcelRx Pharmaceuticals, Inc. is a specialty pharmaceutical company focused on
the development and commercialization of innovative therapies for the
treatment of acute and breakthrough pain.  AcelRx's lead product candidate,
the Sufentanil NanoTab PCA System, or NanoTab System, is designed to solve the
problems associated with post-operative intravenous patient-controlled
analgesia which has been shown to cause harm to patients following surgery
because of the side effects of morphine, the invasive IV route of delivery and
the complexity of infusion pumps.  AcelRx has announced results from two Phase
3 clinical trials for the NanoTab System, and a third Phase 3 study has
completed enrollment, with data expected in the second quarter of 2013.  A New
Drug Application submission is planned for the third quarter of 2013. AcelRx
recently announced positive top-line results for a Phase 2 trial for ARX-04, a
sufentanil formulation for the treatment of moderate-to-severe acute pain,
funded through a grant from USAMRMC.  The company has two additional pain
treatment product candidates, ARX-02 and ARX-03, which have completed Phase 2
clinical development.  For additional information about AcelRx's clinical
programs, please visit www.acelrx.com.

Forward Looking Statements

This press release contains forward-looking statements, including, but not
limited to, statements related to future financial results, including 2013
financial guidance, the process and timing of anticipated future clinical
development of AcelRx Pharmaceuticals' product candidates, including the
release of the Sufentanil NanoTab PCA System top-line clinical trial data, the
release and anticipated timing of additional NanoTab System clinical trial
data, the potential submission of an NDA for NanoTab System and the timing
thereof, therapeutic and commercial potential of NanoTab System and the
anticipated timing and therapeutic and commercial potential of other AcelRx
Pharmaceuticals' product candidates.  These forward-looking statements are
based on AcelRx Pharmaceuticals' current expectations and inherently involve
significant risks and uncertainties.  AcelRx Pharmaceuticals' actual results
and the timing of events could differ materially from those anticipated in
such forward-looking statements as a result of these risks and uncertainties,
which include, without limitation, risks related to: that fact that subsequent
analyses of the data may lead to different (including less favorable)
interpretations of the results than the analyses conducted to date or may
identify important implications of the study that are not reflected in these
statements, or be subject to differing interpretations by the regulatory
agencies; the uncertain clinical development process, including the risk that
clinical trials, have an effective design, or have expected data available on
schedule; any delays or inability to obtain and maintain regulatory approval
of its product candidates in the United States and Europe; its ability to
attract funding partners or collaborators with development, regulatory and
commercialization expertise; its ability to obtain sufficient financing to
complete registration of its product candidates in the United States and
Europe; the market potential for its product candidates; the accuracy of
AcelRx Pharmaceuticals' estimates regarding expenses, capital requirements and
needs for financing; and other risks detailed in the "Risk Factors" and
elsewhere in AcelRx Pharmaceuticals' U.S. Securities and Exchange Commission
filings and reports, including its Quarterly Report on Form 10-Q filed with
the SEC today on May 8, 2013.  AcelRx Pharmaceuticals undertakes no duty or
obligation to update any forward-looking statements contained in this release
as a result of new information, future events or changes in its expectations.

(Logo: http://photos.prnewswire.com/prnh/20130226/MM67303LOGO )

 

SELECTED FINANCIAL DATA
(in thousands, except per share data)
(unaudited)
                                      Three Months Ended  
                                      March 31, 
                                     2013                 2012
Statement of Operations Data
Research grant revenue               $                    $                  
                                          940                 329
Operating expenses:
Research and development ^(1)        9,318                4,771
General and administrative ^(1)      2,191                2,104
Total operating expenses             11,509               6,875
Loss from operations                 (10,569)             (6,546)
Interest expense                     (454)                (594)
Other income (expense), net ^(2)     (1,739)              75
Net loss                             $                    $                
                                     (12,762)              (7,065)
Basic and diluted net loss per       $                    $                  
common share                           (0.34)              (0.36)
Shares used in computing basic and
diluted net                          37,133               19,607

loss per common share
(1) Includes the following non-cash, stock-based
compensation expense:
            Research and development $                    $                  
                                          355                 251
            General and              402                  291
administrative
                   Total non-cash,   $                    $                  
stock-based expense                       757                 542
(2) Other income and expense includes a $1.8 million non-cash charge in the
first quarter of 2013

related to warrants issued in connection with a PIPE financing, completed in
June 2012. 
                                     March 31, 2013       December 31, 2012
Selected Balance Sheet Data
Cash, cash equivalents and           $                    $                
investments                          48,198                59,763
Total assets                         52,985               64,520
Total liabilities                    31,062               30,673
Total stockholders' equity           21,923               33,847

 

SOURCE AcelRx Pharmaceuticals, Inc.

Website: http://www.acelrx.com
Contact: Jim Welch, Chief Financial Officer, 650.216.3511, jwelch@acelrx.com
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