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Sunday, January 17, 2021

AcelRx Pharmaceuticals Inc (NASDAQ:ACRX) Explodes Higher on Analyst Coverage

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AcelRx Pharmaceuticals Inc (NASDAQ:ACRX) is a specialty pharma play that just exploded higher over the last two trading sessions, popping as much as 53% in that time, and breaking above basically all major points of near-term pattern resistance along the way, including the 50-day and 200-day simple moving averages, which are often used by institutional analysts in determining quantitative elements for portfolio timing among money managers.

In this case, the principal catalyst that we can find for the move is the initiation of coverage by a respected Wall Street house: “Jefferies analyst Matthew Andrews assumed coverage on shares of ACRX with a Buy rating and a $7.00 price target, which implies an upside of 208% from current levels.” That assessment implies some obvious upside from current levels, and market participants have so far fallen in line with the view over the past two trading sessions.

AcelRx Pharmaceuticals Inc (NASDAQ:ACRX) trumpets as a specialty pharmaceutical company that focuses on the development and commercialization of therapies for the treatment of acute pain. Its lead product candidate is DSUVIA, a 30 mcg sufentanil sublingual tablet, which is in Phase III clinical trial for the treatment of moderate-to-severe acute pain.

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ACRX’s late-stage investigational product candidate is Zalviso, a pre-programmed and patient-controlled analgesia device that allows hospital patients with moderate-to-severe acute pain to self-dose with sufentanil sublingual tablets to manage their pain. Zalviso is approved in the European Union, Switzerland, Liechtenstein, Iceland, Norway and Australia, or the Territory; and is under development stage in the United States.

According to company materials, “AcelRx Pharmaceuticals, Inc. is a specialty pharmaceutical company focused on the development and commercialization of innovative therapies for the treatment of moderate-to-severe acute pain. A New Drug Application (NDA) for DSUVIA (sufentanil sublingual tablet, 30 mcg), known as ARX-04 outside the United States, with a proposed indication for the treatment of moderate-to-severe acute pain in medically supervised settings, was accepted for filing by the United States Food and Drug Administration (FDA). A joint meeting of the Anesthetic and Analgesic Drug Products Advisory Committee and the Drug Safety and Risk Management Advisory Committee to review the NDA is anticipated to convene this summer. In the EU, the European Medicines Agency (EMA) has notified the Company that the ARX-04 (sufentanil sublingual tablet, 30 mcg) Marketing Authorisation Application (MAA) has passed validation and that the scientific review of the MAA is underway.”

“While the FDA under Dr. Gottlieb is focused on addressing the U.S.’s opioid crisis, we believe this will largely focus on the appropriate use and duration of chronic (not acute) opioid therapy. The CHMP’s decision on the Dsuvia MAA in Europe is expected in H1 2018, and the EMA has already approved Zalviso (a 15mcg tablet of sufentanil). We probability weight our U.S. and Europe Dsuvia estimates at 75% and 80%, respectively,” Andrews said.

The analyst concluded, “ACRX is under-valued due to potent oral opioid Dsuvia’s promise in medicallysupervised acute pain markets (~92M patients) and we see high likelihood of U.S./EU approvals in Q4’17/H1’18. Risk/reward is favorable into H1’18 with floor of ~$1.25 (no approvals) vs. $12/share (upside scenario).”

Recent action has seen 45% tacked on to share pricing for the name in the past week, but that move comes in the context of a larger bearish trend. That said, ACRX is a stock whose past is littered with sudden rips. Moreover, the stock has seen interest climb, with an increase in recent trading volume of above 530% beyond what we have been seeing over the larger time frame.

At this time, carrying a capital value in the market of $187.32M, ACRX has a significant war chest ($72.3M) of cash on the books, which compares with about $6.2M in total current liabilities. ACRX is pulling in trailing 12-month revenues of $17.4M. In addition, the company is seeing major top line growth, with y/y quarterly revenues growing at 2.8%. This is an exciting story, and we look forward to a follow-up chapter as events transpire. For continuing coverage on shares of $ACRX stock, as well as our other breakout picks, sign up for our free newsletter today and get our next hot stock pick!

Disclosure: we hold no position in $ACRX, either long or short, and we have not been compensated for this article.

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