AcelRx Pharmaceuticals, Inc.

ACRX Details

AcelRx Pharmaceuticals, Inc. (NASDAQ: ACRX) is a specialty pharmaceutical company focused on developing and commercializing therapies for the treatment of acute pain. Its main pipeline products are DSUVIA (also known as DZUVEO in Europe) and Zalviso. In addition, ACRX is developing ARX-02 and ARX-03. The US accounts for the majority of DSUVIA's revenue.

Presentation on Effect of Sufentanil Sublingual Tablet: On August 30, 2021, ACRX announced the results of an evaluation study of sufentanil sublingual tablet 30 mcg (SST) tablet for outpatient plastic surgery, presented at the Miami Cosmetic Surgery (MCS) conference on August 27, 2021, at the Miami Beach Convention Center in Florida. The study was conducted by dosing SST to 25 patients with an average of 46.1 (+/- 2.4) years, 30 min before starting an awake plastic surgery procedure. It was observed that no other analgesic except for SST dose local anesthetic infiltration was required throughout the surgery. Majority of the patients recovered in an average of 15 (+/- 5) minutes, with only two cases of nausea. The therapy intends to reduce post-surgery recovery time and the use of opioids on patients going under awake procedures.

Q2FY21 Results: The company reported a YoY decline of 84.85% in total revenue to USD 0.44 million in Q2FY21 (ended June 30, 2021) compared to USD 2.92 million in Q2FY20, attributable to a decline in Contract & Other Collaboration revenue due to the termination of Grünenthal agreements (which previously granted Grünenthal GmbH the right to market Zalviso in Europe). Net loss for the company increased to USD 9.85 million in Q2FY21 vs. USD 6.61 million in Q2FY20. As of June 30, 2021, the company had cash & cash equivalents (including short-term investments) of USD 55.33 million and total debt of USD 18.14 million.

Key Risks: ACRX's prospects are dependent on the success of DSUVIA. It has invested a significant amount of resources in its development. If it fails to obtain marketing approvals or is unable to set up an efficient manufacturing and distribution mechanism in place, its results of operations could be adversely impacted. In addition, ACRX depends on a limited number of distributors and pharmaceutical wholesalers to distribute DSUVIA and Zalviso. Therefore, any failure on the contractual obligation by distributors and wholesalers could harm its operations.

Outlook: ACRX has received 516 formulary approvals as of July 31, 2021, and expects to surpass its guidance of receiving a total of 615 approvals by FY21 end.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

ACRX Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: ACRX's share price fell 19.05% in the past nine months and is currently leaning towards the lower-band of the 52-week range of USD 0.75 to USD 2.94. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 40.06. We have valued the stock using the EV/Sales multiple-based relative valuation methodology and arrived at a target price of USD 1.14. Considering the correction in the stock price, current valuation, and associated risks, we recommend a "Hold" rating on the stock at the current price of USD 1.02 as of September 17, 2021, at 12:31 PM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

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