July 28 Shares of AcelRx Pharmaceuticals Inc
plunged nearly 28 percent in premarket trading, after
the U.S. Food and Drug Administration rejected its pain drug
device, Zalviso, late on Friday.
Analysts said they expected the product to eventually
receive approval as the issues cited in Zalviso's "rather mild"
complete response letter were requests for additional
information largely around the device.
AcelRx said it would resubmit its marketing application for
Zalviso by the end of the year, pending further discussions with
The needle-free, handheld, patient-controlled system is
designed for the management of moderate-to-severe pain in adult
patients in a hospital setting.
Zalviso, consists of sufentanil, an opioid, and is delivered
using AcelRx's flagship NanoTab technology which enables rapid
absorption when placed under the tongue.
In its complete response letter to the company, the agency
did not ask for any additional efficacy trials but requested
additional information to ensure proper use of the device.
Canaccord Genuity analyst John Newman cut his rating on the
stock to "hold" from "buy" and halved his price target to $8
based on "on the unexpected magnitude of delay for Zalviso and
concerns over stability/shelf life" of the product.
Roth Capital Partners, Mizuho and JMP Securities analysts
said the rejection would likely result in a one-year delay to
approval as the FDA's requests were readily addressable.
The FDA sought changes to the instructions for use for the
device and additional data to support its shelf life.
"ACRX was surprised to receive a CRL for issues it believes
could have been resolved with a routine (review) PDUFA delay;
almost exclusively straightforward device/instruction issues
rather than drug concerns," JMP analyst Oren Livnat said.
"This increases our overall confidence in approvability,
albeit after an unfortunate delay," Livnat said, maintaining his
"market outperform" rating on the stock.
The delay bodes well for the The Medicines Company
whose rival experimental pain product Ionsys will now likely
gain a timing advantage. The company submitted an application to
market the treatment in late June.
"Thus, assuming a first-pass approval, Ionsys now appears to
have at least a 2-month head start on Zalviso," Roth Capital
Partners analyst Ed Arce said, cutting his price target on the
stock to $16 from $22.
RBC Capital Markets analysts reduced their 2021 U.S. sales
forecast for Zalviso by $50 million to $350 million.
An application to market Zalviso in Europe was submitted by
the company's German partner Grunenthal Group earlier in July.
The product is also undergoing development for use in
breakthrough pain in cancer patients, pain relief for patients
undergoing procedures in a physician's office and acute pain.
Four brokerages - Roth Capital Partners, JMP Securities,
Mizuho and RBC Capital - kept their positive ratings on the
The Redwood City, California-based specialty pharmaceutical
company's stock was trading at $7.77 premarket on Monday after
closing at $10.83 on the Nasdaq on Friday.
(Reporting by Natalie Grover in Bangalore; Editing by Saumyadeb