Here’s Why AcelRx Pharmaceuticals, Inc. (NASDAQ:ACRX) Just Took A Hit


One of the biggest late-week movers in the biotechnology space this week is AcelRx Pharmaceuticals, Inc. (NASDAQ:ACRX) and, unfortunately for the company and its shareholders, it’s not being a positive move.

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On Thursday, AcelRx announced that the FDA has issued a Complete Response Letter (CRL) to the company in response to its New Drug Application (NDA) for a drug called DSUVIA.

This is a drug that the company has been trying to get approved for a while now as a treatment for pain management but, to date, hasn’t had much luck. The asset is an alternative take on an opioid painkiller, designed to fill a current gap in the market in patients that require rapid action pain relief in a variety of settings.

For example, in the battlefield, or at a trauma site, or even in postoperative situations, the standard administration methods may not be available or effective. Intravenous administration generally requires special equipment and intramuscular injection, which is the current standard of care in the space, has been shown to be less effective in patients suffering from shock trauma, since the muscles are not well perfused, and, by proxy, pain medication given by intramuscular injection may not readily reach the bloodstream to provide pain relief.

So, the idea behind DSUVIA is that it is a delivery to that can deliver a single dissolvable tablet sublingually (so, under the tongue), providing rapid onset pain relief without having to inject anything or to set up an IV line.

It’s a pretty neat idea but, as the FDA just highlighted, there are some concerns associated – primarily – with safety.

Here is what the FDA pointed out as key to its decision to approve the drug in its current format as part of the CRL (there were two primary drivers behind said decision):

“(First) the collection of additional data was requested on at least 50 patients to assess the safety of DSUVIA dosed at the maximum amount described in the proposed labelling; second, to ensure proper administration of the tablet with the single-dose applicator, the FDA recommended certain changes to the Directions for Use to address use-related errors, including dropped tablets, to be validated through a human factors study.”

So, the first of these suggests that the data collected by the company at the maximum dosage wasn’t sufficient enough to prove beyond doubt that it can be safe in its target population. As such, the AcelRx is going to have to conduct an additional study based on at least 50 patients at the maximum dosage. This sort of thing is exactly what a company at this end of the space hopes to avoid when it submits an application to the FDA as additional studies take time and, by proxy, cost money.

The second is rooted in labeling, with the FDA feeling that the directions for use aren’t clear enough as relates to the applicator device and its potential for dropping tablets (on the floor, etc.) when in use.

For reference, it’s a sort of single unit injector type device (for those who are familiar with it, think a Pez dispenser without the cartoon face).

Again, just as with the first concern, the problem with this second issue is that it is likely going to necessitate further investigation (by way of a clinical study) in order to prove to the agency that there are no human error concerns built into the device. If there are, a redesign is going to be expensive and would likely prohibit approval for some time.

So that is why the company is down right now – management is going to have to conduct two separate studies, one safety study involving at least 50 individuals at maximum dose and one human factors study designed to prove that the applicator device is effective in its aim of delivering a single dose without losing tablets or over-dispensing.

Management is yet to give us any sort of indication as to when it intends to kick off the studies or how long they might take, but at best, we are probably looking at a late first half 2018 resubmission from AcelRx, and that’s assuming things run smoothly.

At its most recent close, AcelRx went for $2.15 a share, down month 60% on its pre-announcement capitalization.

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