(Adds details; updates shares)
July 28 Shares of AcelRx Pharmaceuticals Inc
plunged almost 40 percent after the U.S. Food and Drug
Administration rejected its pain treatment late on Friday.
The rejection also reduces the lead the drug device,
Zalviso, was likely to have over a rival from Medicines Company
, which was submitted for approval in late June.
Analysts, who were surprised by the decision, said the
issues cited by the FDA were "rather mild" and expected Zalviso
to eventually receive approval.
The FDA in its complete response letter (CRL) sought more
data to ensure proper use of the device but did not ask for
additional human clinical trials.
"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 wrote,
maintaining his "market outperform" rating on the stock.
AcelRx said it would resubmit its application by the end of
the year, pending further discussions with the FDA.
Roth Capital Partners, Mizuho Securities and JMP Securities
analysts said the rejection would likely result in a one-year
delay to approval.
Zalviso and Medicines', Ionsys, are designed for the
management of pain in a hospital setting.
"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 AcelRx
stock to $16 from $22.
RBC Capital Markets analysts reduced their 2021 U.S. sales
forecast for Zalviso by $50 million to $350 million.
Zalviso, consists of sufentanil, an opioid, and is delivered
using AcelRx's flagship NanoTab technology that enables rapid
absorption when placed under the tongue.
If approved, it will mark the first time that sufentanil,
which is usually injected, becomes available for oral
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.
The Redwood City, California-based specialty pharmaceutical
company's stock was down about 38 percent at $6.68 in afternoon
trade on the Nasdaq on Monday.
The stock was the biggest percentage loser on the exchange,
with nearly 8.4 million shares changing hands by 1200 ET - more
than 10 times their 50-day average.
(Reporting by Natalie Grover in Bangalore; Editing by Saumyadeb
Chakrabarty and Sriraj Kalluvila)