AcelRx Pharmaceuticals Provides Business Update and Reports Second Quarter and Six Months 2015 Financial Results

Aug 03, 2015, 16:01 ET from AcelRx Pharmaceuticals, Inc.

REDWOOD CITY, Calif., Aug. 3, 2015 /PRNewswire/ -- AcelRx Pharmaceuticals, Inc. (Nasdaq: ACRX), a specialty pharmaceutical company focused on the development and commercialization of innovative therapies for the treatment of acute pain, today provided a business update and reported financial results for the three and six months ended June 30, 2015.

Business highlights include:

  • On July 23, 2015, the Committee for Medicinal Products for Human Use (CHMP) adopted a positive opinion for Zalviso™ for the management of acute moderate-to-severe post-operative pain in adult patients in a hospital setting. A decision by the European Commission (EC) on the approval of Zalviso is anticipated in late September or early October.
  • AcelRx has been granted a General Advice meeting with the U.S. Food and Drug Administration (FDA) in early September to discuss the FDA's request for a clinical trial and the company's planned response to the Complete Response Letter (CRL) issued by the FDA for the New Drug Application (NDA) for Zalviso.
  • SAP301, a pivotal Phase 3 study of ARX-04 (sufentanil sublingual tablet, 30 mcg), is fully enrolled. Top-line data from this study is anticipated early in the fourth quarter of 2015.

"The positive opinion and recommendation for approval of Zalviso by the CHMP is an important step towards approval by the EC. In the U.S., we have a meeting scheduled with the FDA to work towards determining a regulatory path forward," commented Howie Rosen, interim chief executive officer of AcelRx. "Lastly, we look forward to the top-line data from the SAP301 Phase 3 study of ARX-04. ARX-04 represents a significant opportunity for AcelRx and has the potential to be the first sublingual, high-potency opioid for use in non-opioid tolerant patients."

Second Quarter Financial Results

Net loss for the second quarter of 2015 was $8.9 million, or $0.20 basic and diluted net loss per share, compared to a net loss of $10.6 million, or $0.24 basic net loss per share and $0.30 diluted net loss per share for the second quarter of 2014. The decrease in the net loss and net loss per share was primarily due to revenue generated under AcelRx's contract with the Department of Defense (DoD) for ARX-04 development, and decreased general and administrative expenses as a result of the cost reduction plan implemented at the end of March 2015, partially offset by having no other income in the second quarter of 2015, as compared to $2.2 million recognized in the second quarter of 2014. Common shares used in calculating earnings per share were 44.3 million for basic and diluted EPS in the second quarter of 2015, compared to 43.3 million for basic EPS and 44.3 million for diluted EPS in the second quarter of 2014.

For the second quarter 2015, AcelRx recognized $1.4 million in revenue related to the DoD contract signed in May 2015 and $486,000 of previously deferred revenue under the collaboration agreement with Grunenthal, as compared to $71,000 of previously deferred revenue related to the Grunenthal agreement for the quarter ended June 30, 2014.

Research and development expenses for the quarter ended June 30, 2015 were $7.3 million, compared to $7.3 million for the quarter ended June 30, 2014. Research and development expenses during the three months ended June 30, 2015, as compared to the three months ended June 30, 2014, included a $2.5 million reduction in Zalviso development program expenses, offset by a $2.0 million increase related to SAP301, a pivotal Phase 3 clinical study for ARX-04, and a $0.5 million increase in research and development overhead expenses, including a $0.4 million increase in facilities expense, primarily related to the amortization of the tenant improvements at our contract manufacturer's facility and depreciation of manufacturing equipment.

General and administrative expenses were $2.7 million for the second quarter of 2015, compared with $5.0 million for the second quarter of 2014. The decrease was primarily due to a $2.3 million reduction in market research expenses and a significant reduction in pre-commercialization activities related to Zalviso.

Other income and expense included $2.5 million in non-cash income in the second quarter of 2014 resulting from the liability accounting related to the PIPE warrants, which are considered a liability for accounting purposes and remeasured at the end of each reporting period utilizing the Black-Scholes valuation model. As of June 30, 2015, there were approximately 0.5 million PIPE warrants outstanding.

Year-to-Date Financial Results

For the six months ended June 30, 2015, AcelRx reported a net loss of $18.9 million, or $0.43 basic net loss per share and $0.47 diluted net loss per share, compared to $20.2 million, or $0.47 basic net loss per share and $0.50 diluted net loss per share for the same period in 2014. Common shares used in calculating earnings per share were 44.1 million for basic EPS and 44.4 million for diluted EPS in the six months ended June 30, 2015, compared to 43.3 million for basic EPS and 43.8 million for diluted EPS in the six months ended June 30, 2014.

As mentioned above, AcelRx recognized $1.4 million in revenue related to the DoD contract in the six months ended June 30, 2015. In addition, in the six months ended June 30, 2015, AcelRx recognized $667,000 of previously deferred revenue under the collaboration agreement with Grunenthal, as compared to $166,000 in the six months ended June 30, 2014.

Research and development expenses in the six months ended June 30, 2015 were $13.6 million, compared to $12.0 million in the six months ended June 30, 2014. The increase was primarily attributable to a $2.5 million increase related to the ARX-04 development program, a $0.8 million increase in manufacturing facilities expense, and an increase of $0.9 million in personnel-related expenses, including stock-based compensation, partially offset by a $2.5 million decrease related to the Zalviso Phase 3 clinical program. 

General and administrative expenses were $7.3 million in the six months ended June 30, 2015, compared to $9.0 million in the six months ended June 30, 2014. The decrease was a result of a $3.0 million decrease in market research and outside services, primarily related to market research activities for Zalviso, partially offset by an increase of $1.3 million, primarily due to a $1.2 million increase in headcount-related expenses, including a $0.5 million increase in stock-based compensation.

Other income and expense includes $2.1 million and $1.8 million in non-cash income in the six months ended June 30, 2015 and 2014, respectively, resulting from the liability accounting related to the PIPE warrants.

As of June 30, 2015, AcelRx had cash, cash equivalents and investments of $51.2 million, compared to $75.4 million at December 31, 2014. The net decrease in cash, cash equivalents and investments was $24.2 million for the six months ended June 30, 2015, $13.3 million for the second quarter 2015 and $10.9 million for the first quarter 2015. In the second quarter of 2015, AcelRx began making principal payments on its outstanding debt with Hercules, which payments totaled $2.2 million.

"The decrease in cash in the second quarter of 2015 was higher than the first quarter of 2015 mainly due to principal payments made under the line of credit with Hercules," stated Tim Morris, chief financial officer of AcelRx Pharmaceuticals. "Assuming receipt of the $15 million milestone from Grunenthal for approval of Zalviso in the EU, which is currently anticipated to be received in the fourth quarter of this year, and revenues earned under the DoD contract for ARX-04, we anticipate our cash balance at the end of the year to be approximately $45 million."

Conference Call

AcelRx will conduct a conference call and webcast today, August 3, 2015 at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss its financial results and business updates. To listen to the conference call, dial in approximately ten minutes before the scheduled call 1-866-361-2335 for domestic callers, 1-855-669-9657 for Canadian callers, or 1-412-902-4204 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 Q2 2015 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 pain. AcelRx's product candidate, Zalviso™, is designed for the management of moderate-to-severe acute pain in adult patients in the hospital setting by utilizing a high therapeutic index opioid, through a non-invasive delivery route via a pre-programmed, patient-controlled analgesia device. AcelRx has submitted an NDA to the FDA seeking approval for Zalviso in the treatment of moderate-to-severe acute pain in adult patients in the hospital setting and on July 25, 2014, received a CRL from the FDA. In March 2015, AcelRx received correspondence from the FDA stating that in addition to the bench testing and two Human Factors studies AcelRx had completed in response to the issues identified in the CRL, an additional clinical trial is needed to assess the risk of inadvertent dispensing and overall risk of dispensing failures. AcelRx has been granted a General Advice meeting with the FDA in early September to discuss the FDA's request for a clinical trial and the company's planned response to the CRL issued by the FDA for the NDA for Zalviso. Pending the outcome of the meeting, AcelRx intends to determine what additional work, if any, is required and finalize its plans to refile the NDA for Zalviso. AcelRx will then evaluate next steps to seek a pathway forward towards gaining approval of Zalviso in the U.S. In March 2015, AcelRx initiated SAP301, a pivotal Phase 3 study for ARX-04 (sufentanil sublingual tablet, 30 mcg), a product candidate for the treatment of moderate-to-severe acute pain in a medically supervised setting. AcelRx expects top-line data from this study early in the fourth quarter of 2015. 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 the process and timing of anticipated future development of AcelRx's product candidates, including  Zalviso and ARX-04, including the upcoming September General Advice meeting with the FDA; statements related to the potential approval of the MAA for Zalviso and the timing of commercial launch of Zalviso in Europe; potential milestone payments under the Grunenthal agreement and the anticipated timing of receipt of these payments; potential revenue under the Department of Defense contract; anticipated cash balance at year-end 2015; AcelRx's plans to seek a pathway forward towards gaining approval of Zalviso in the U.S.; and the anticipated timing of top-line results from SAP301, a pivotal Phase 3 study for ARX-04.

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: any delays or inability to obtain and maintain regulatory approval of its product candidates, including Zalviso and ARX-04, in the United States and Europe; any delay of the European Commission's decision regarding Zalviso; the European Commission disagreeing with the positive opinion for Zalviso reached by the CHMP; inability to successfully manufacture Zalviso to meet the requirements of Grunenthal and potential delays in the timing of the European launch; the market potential for its product candidates, including Zalviso and ARX-04, in the United States and Europe; its ability to obtain sufficient financing to receive regulatory approval for and commercialize Zalviso in the United States, and complete Phase 3 clinical development of ARX-04; delay in obtaining the top-line data from SAP301, a pivotal Phase 3 study of ARX-04; delay or cancellation of the General Advice meeting with the FDA regarding Zalviso, scheduled for early September; AcelRx Pharmaceuticals' ability to finalize the pathway towards resubmission of the Zalviso NDA to the FDA; the ability to maintain compliance with contractual compliance matters and requirements; 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 on May 5, 2015. 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.

 

Selected Financial Data

(in thousands, except per share data)

(unaudited)

 Three Months Ended  

 Six Months Ended  

 June 30, 

 June 30, 

2015

2014

2015

2014

Statement of Comprehensive Loss Data

Collaboration agreement revenue

$                       486

$                         71

$                       667

$                       166

Contract revenue 

1,438

-

1,438

-

      Total revenue

1,924

71

2,105

166

Operating expenses:

Research and development (1)

7,310

7,284

13,616

11,995

General and administrative (1)

2,735

5,047

7,256

8,972

Restructuring costs

2

-

756

-

Total operating expenses

10,047

12,331

21,628

20,967

Loss from operations

(8,123)

(12,260)

(19,523)

(20,801)

Interest expense

(777)

(530)

(1,583)

(1,002)

Interest income and other income (expense), net(2)

4

2,215

2,184

1,597

Net loss

$                  (8,896)

$                (10,575)

$                (18,922)

$                (20,206)

Basic net loss per common share

$                    (0.20)

$                    (0.24)

$                    (0.43)

$                    (0.47)

Shares used in computing basic net loss per common share

44,343

43,333

44,109

43,262

Diluted net loss per common share

$                    (0.20)

$                    (0.30)

$                    (0.47)

$                    (0.50)

Shares used in computing diluted net loss per common share

44,343

44,310

44,397

43,774

(1)   Includes the following non-cash, stock-based compensation expense:

            Research and development

$                       629

$                       560

$                    1,331

$                    1,039

            General and administrative

482

334

1,318

830

                   Total 

$                    1,111

$                       894

$                    2,649

$                    1,869

(2)  Interest income and other income (expense) includes $0.1 million in non-cash charges for the three months ended June 30, 2015 and $2.1 million in non-cash income for the six months ended June 30, 2015 as compared to $2.5 million and $1.8 million in non-cash income for the three and six months ended June 30, 2014, respectively, related to warrants issued in connection with a private placement equity financing, completed in June 2012. 

 

June 30, 2015

December 31, 2014

Selected Balance Sheet Data

Cash, cash equivalents and investments

$                  51,195

$                  75,350

Total assets

63,560

86,447

Total liabilities

30,169

39,791

Total stockholders' equity 

33,391

46,656

 

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SOURCE AcelRx Pharmaceuticals, Inc.



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