AcelRX Pharmaceuticals (ACRX) has had an impressive year behind it culminating with the completion of three phase 3 trials for its NanoTab™ platform's ARX-01. The therapy is a sublingual caplet containing sufentanil, an opioid analgesic currently marketed for IV and epidural anesthesia. An effective analgesic, sufentanil is typically administered intravenously for the control of many types of pain. However, its effectiveness wanes after an initial spike of the active ingredient in the patient's blood plasma. ARX-01's goal is to address the issue by administering a constant amount of the active ingredient by absorption through the skin of the sublingual (under the tongue) caplet.
The first of the company's phase 3 topline data sets, for its NanoTab™ system, was announced on November 15th with positive results. Data indicated the therapy was "statistically superior to IV PCA morphine for the PGA (patient global assessment) endpoint (p=0.009)." The trial was evaluating ARX-01 versus IV-administered PCA morphine to control post operative pain. Data was impressive and likely indicative of the results probable for the remaining two trials whose data is scheduled to be released in Q1, 2013. Shares soared on the news, with a new 52-week high of $5.25 reached.
Share price has gradually trended down since the news, with acceleration in decline due to an announcement by the company on Wednesday, December 5th that the company had registered an offering for 10 million shares. The price on the offering was not given, and shareholders began panicking. The company's stock sold off from the closing trade on the Tuesday of $3.94 to the opening trades on the 5th of $3.65. The share price continued to trend down with a closing price on Thursday of $3.31. The market has not been as friendly recently with offerings, partly due to the huge discount of Supernus Pharmaceuticals' (SUPN) 6 million share offering. Trading in the $12-$14 range for much of the month since its October 22nd FDA approval for its epilepsy drug, Oxtellar XR™, Supernus' offering was priced at $8.00 per share, a near 20% discount on the previous day's close and a 33% discount on the $12 range it was trading at just a couple of days before.
In what could catalyze AcelRX's share price today, the company announced after the markets had closed yesterday evening that it was pricing its offering at $3.31, at that day's closing price. Not priced at the discount that many likely expected, the news may catalyze the company's share price to the upside not only on Friday but also well into Q1, 2013. With the remaining two phase 3 trials set to present in Q1, investor interest will likely return in anticipation of the data. Investors interested in the company should preview the phase 2 data with the measured reduction in pain intensity relative to the IV PCA morphine of p<0.02 for elected knee surgery and p<0.001 for abdominal surgery, both highly significant values. It appears that the phase 2 successes carried over into successful phase 3 data for abdominal surgery, and the author sees no reason why that will not occur in the elected knee surgery indication not yet presented or the functionality study of the handheld component of ARX-01 in unilateral knee replacement surgery.
With solid data already being presented and more possibly on the way, the company could be entertaining offers for marketing or licensing the drug. Such an announcement could be on the way, but should only be construed as a speculative possibility at this time. Another bit of logic to be considered is that the offering priced at yesterday's close with no discount noted could be indicative of solid data and a solid regulatory path and perceived marketing of the product in the future. A solid apparent future can give comfort to underwriters who would desire share price discounts in order to assure their interests are protected if they had significant concerns about the company's future.
Interested investors should perform additional research in AcelRX before opening a position in the company's common shares. The company is still a development phase company with no real source of revenue and still has to finish navigating the regulatory pathway to approval, if it is given. The company is likely entertaining offers for partnering or licensing out the therapy, which may or may not occur or be announced in the near future. AcelRX is planning on submitting a new drug application (NDA) to the FDA in mid 2013, providing another significant catalyst to keep investor attention in the coming months. Another likely catalyst will be the submission for European marketing approval, also likely to happen in H1 2013. The phase 3 trial design was construed as acceptable by the FDA as well as the European Marketing Agency to enable consideration for marketing approval in the European markets if the trial met its designed endpoints. If all goes well and as planned for AcelRX in 2012, the company could have a marketed product in the U.S. and Europe with a partner to shoulder at least some of the initial costs by the end of the year. Investors are advised to perform their own risk assessments and determine if this is a suitable investment for them in 2013. Unknowns always lie in wait, but the author believes this to be a solid investment going forward and will likely maintain a long position throughout all or most of 2013.