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AcelRx Pharmaceuticals Reports Fourth Quarter and Full Year 2014 Financial Results

REDWOOD CITY, Calif., March 9, 2015 /PRNewswire/ -- AcelRx Pharmaceuticals, Inc. (Nasdaq: ACRX), (AcelRx), a specialty pharmaceutical company focused on the development and commercialization of innovative therapies for the treatment of acute pain, today reported financial results for the three and twelve months ended December 31, 2014.    

Fourth Quarter 2014 Financial Results

Net loss for the fourth quarter of 2014 was $13.8 million, or $0.32 basic and diluted net loss per share, compared to $17.8 million net income, or $0.41 basic net income per share and $0.39 diluted net income per share, for the fourth quarter of 2013.

Net loss in the fourth quarter as compared to net income in the fourth quarter last year was primarily due to the receipt of a $30.0 million upfront payment under the collaboration agreement with Grunenthal, of which $27.4 million was recognized as revenue in the fourth quarter of 2013. In the fourth quarter of 2014, operating expenses of $12.0 million increased by $4.4 million from $7.6 million in the fourth quarter of 2013, primarily due to research and development activities to support resubmission of the Zalviso NDA, and an increase in headcount and related expenses in preparation for the potential commercialization of Zalviso.

During the fourth quarter of 2014, AcelRx recognized $226,000 of previously deferred revenue under the collaboration agreement with Grunenthal. During the fourth quarter of 2013, in addition to the $27.4 million in revenue recognized under the Grunenthal collaboration, AcelRx also recognized revenue of $237,000 resulting from reimbursement for work completed under a research grant from the U.S. Army for development of ARX-04. Work under this research grant was completed in the fourth quarter of 2013.    

Research and development expenses for the fourth quarter 2014 were $7.3 million, compared to $4.3 million for the fourth quarter 2013. The increase was primarily due to activities to support the resubmission of the Zalviso NDA, build-out of the Medical Affairs team and continued development work on ARX-04.      

General and administrative expenses were $4.7 million for the fourth quarter of 2014, compared to $3.3 million for the fourth quarter of 2013. The increase was primarily due to activities in support of the potential commercialization of Zalviso.  

Full Year 2014 Financial Results

For the year ended December 31, 2014, AcelRx reported a net loss of $33.4 million, or $0.77 basic net loss per share and $0.91 diluted net loss per share, compared to $23.4 million net loss, or $0.59 basic and diluted net loss per share for 2013.  

Revenue for 2014 was $5.2 million, including the receipt of a $5 million milestone payment from Grunenthal for the filing of the Marketing Authorization Application, or MAA, for Zalviso in Europe.  Revenue for 2013 was $29.5 million mainly from the upfront payment received from Grunenthal for the collaboration agreement signed in December 2013.

Research and development expenses for 2014 were $24.5 million, compared to $26.3 million for 2013.  The decrease in research and development expense for 2014 was primarily due to a high level of activity associated with Phase 3 clinical studies of Zalviso in 2013.  General and administrative expenses were $18.3 million for 2014, compared to $9.9 million for 2013.  The increase was primarily due to an increase in headcount, market research programs and other activities in preparation for the potential commercialization of Zalviso.  

As of December 31, 2014, AcelRx had cash, cash equivalents and investments of $75.4 million, compared to $103.7 million at December 31, 2013.  The decrease in cash during the year was driven by cash used in operations and investing activities of $40.2 million, primarily offset by the $10.0 million drawdown of the second tranche of the loan agreement with Hercules and receipt of $1.9 million from the exercise of stock options and purchase of stock under the employee stock purchase plan.

Corporate Update

AcelRx recently received correspondence from the U.S. Food and Drug Administration ("FDA") stating that in addition to the bench testing and two Human Factors studies it has performed, an additional clinical study is needed to assess the risk of inadvertent dispensing and overall risk of dispensing failures. AcelRx plans to meet with the FDA to discuss and clarify the need and potential objectives of an additional clinical study for Zalviso.

Conference Call

AcelRx will conduct a conference call and webcast today, March 9, at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss its financial results and program updates.  To listen to the conference call, dial in approximately ten minutes before the scheduled call to 1-866-361-2335 for domestic callers, 1-855-669-9657 for Canadian callers, or 1-412-902-4204 for international callers.  Those interested in listening to the conference call live via the Internet may do so by visiting the Investors section of the company's website at www.acelrx.com and selecting the Webcast link for the Q4 2014 earnings conference call.  A webcast replay will be available on the AcelRx website for 90 days following the call by visiting the Investors section of the company's website at www.acelrx.com.

About Zalviso™

Zalviso is an investigational pre-programmed, non-invasive system to allow hospital patients with moderate-to-severe acute pain to self-dose with sufentanil sublingual tablets to manage their pain.  Zalviso consists of sufentanil tablets delivered by the Zalviso System, a needle-free, handheld, patient-administered, pain management system (together, "Zalviso").  Zalviso is designed to help address certain problems associated with post-operative intravenous patient-controlled analgesia, by offering:

  • A high therapeutic index opioid: Zalviso uses sufentanil, an opioid that has a high therapeutic index. The therapeutic index is the ratio of the effective dose versus the lethal dose. In animal studies, the therapeutic index for sufentanil was approximately 100 times larger than fentanyl and 300 times larger than morphine. 
  • A non-invasive route of delivery: Zalviso utilizes a sufentanil tablet which allows for a sublingual (under the tongue) route of delivery. Sufentanil is highly lipophilic which provides for rapid absorption in the fatty cells (or mucosal tissue) found under the tongue and for rapid transit across the blood-brain barrier to reach the mu-opioid receptors in the brain. The sublingual delivery used by Zalviso provides rapid onset of analgesia. The sublingual delivery system also eliminates the risk of IV-related analgesic gaps and IV complications, such as catheter-related infections. In addition, because patients do not require direct connection to an IV PCA infusion pump through IV tubing, Zalviso allows for ease of patient mobility.
  • A pre-programmed PCA solution: Zalviso allows patients to self-dose sufentanil sublingual tablets via a pre-programmed, secure system designed to eliminate the risk of programming errors.

About AcelRx Pharmaceuticals, Inc.

AcelRx Pharmaceuticals, Inc. is a specialty pharmaceutical company focused on the development and commercialization of innovative therapies for the treatment of acute and breakthrough pain.  AcelRx's lead product candidate, Zalviso, is designed to improve the management of moderate-to-severe acute pain in adult patients in the hospital setting by utilizing a high therapeutic index opioid, through a non-invasive delivery route via a pre-programmed, patient-controlled analgesia device. AcelRx has announced positive results from each of the three completed Phase 3 clinical trials for Zalviso, has submitted an NDA to the FDA seeking approval for Zalviso in the treatment of moderate-to-severe acute pain in adult patients in the hospital setting and on July 25, 2014, received a Complete Response Letter from the FDA. AcelRx recently received correspondence from the FDA stating that in addition to the bench testing and two Human Factors studies AcelRx has performed, an additional clinical study is needed to assess the risk of inadvertent dispensing and overall risk of dispensing failures. AcelRx plans to meet with the FDA to discuss and clarify the need and potential objectives of an additional clinical study for Zalviso. AcelRx plans to initiate a Phase 3 clinical trial for ARX-04, a product candidate for the treatment of moderate-to-severe acute pain in a medically supervised setting. The Company has two additional pain treatment product candidates, ARX-02 and ARX-03, which have completed Phase 2 clinical development.  For additional information about AcelRx's clinical programs, please visit www.acelrx.com.

Forward-Looking Statements

This press release contains forward-looking statements, including, but not limited to, statements related to future financial results, including the process and timing of anticipated future development of AcelRx's product candidates, including Zalviso; the Zalviso NDA submission and the CRL; AcelRx's plans to meet with the FDA to discuss and clarify the need and potential objectives of an additional clinical study for Zalviso; the Type A meeting held with the FDA to discuss the CRL; the tasks AcelRx has completed to address the issues raised in the CRL, and anticipated resubmission of the Zalviso NDA to the FDA, including the scope of the resubmission and the timing of the resubmission and FDA review time; the impact, if any, of the FDA's review of the amendments to the Zalviso NDA that were not previously reviewed; and the therapeutic and commercial potential of AcelRx Pharmaceuticals' product candidates, including Zalviso.

These forward-looking statements are based on AcelRx Pharmaceuticals' current expectations and inherently involve significant risks and uncertainties. AcelRx Pharmaceuticals' actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks related to: AcelRx Pharmaceuticals' ability to receive regulatory approval for Zalviso; any delays or inability to obtain and maintain regulatory approval of its product candidates, including Zalviso, in the United States and Europe; the success, cost and timing of all product development activities and clinical trials; the market potential for its product candidates; the accuracy of AcelRx's estimates regarding expenses, capital requirements and needs for financing; and other risks detailed in the "Risk Factors" and elsewhere in AcelRx Pharmaceuticals'U.S. Securities and Exchange Commission filings and reports, including its Quarterly Report on Form 10-Q filed with the SEC on November 10, 2014. AcelRx Pharmaceuticals undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations.



Selected Financial Data

(in thousands, except per share data)

(unaudited)










 Three Months Ended  


 Twelve Months Ended  


 December 31, 


 December 31, 


2014


2013


2014


2013

Statement of Comprehensive Loss Data








Revenue:








  Collaboration agreement

$   226


$   27,370


$    5,217


$   27,370

  Research grant 

-


237


-


2,132

      Total revenue

226


27,607


5,217


29,502









Operating expenses:








Research and development (1)

7,281


4,318


24,520


26,292

General and administrative (1)

4,724


3,306


18,346


9,877

Total operating expenses

12,005


7,624


42,866


36,169

Loss from operations

(11,779)


19,983


(37,649)


(6,667)









Interest expense

(821)


(313)


(2,639)


(1,518)

Interest income and other income (expense), net(2)

(1,218)


(1,901)


6,935


(15,241)

Net income (loss)

$  (13,818)


$  17,769


$  (33,353)


$  (23,426)









Basic net income (loss) per common share

$      (0.32)


$      0.41


$      (0.77)


$      (0.59)









Diluted net income (loss) per common share

$     (0.32)


$      0.39


$      (0.91)


$      (0.59)









Shares used in computing basic net income (loss) per common share

43,709


43,044


43,427


39,747









Shares used in computing diluted net income (loss) per common share(3)

43,709


45,755


44,322


39,747

















(1)   Includes the following non-cash, stock-based compensation expense:













            Research and development

$      645


$     464


$    2,252


$    1,657

            General and administrative

727


580


2,188


1,822

                   Total 

$  1,372


$  1,044


$    4,440


$    3,479









(2)

Interest income and other income (expense), net includes $1.2 million in non-cash charges and $7.0 million in non-cash income for the three and twelve months ended December 31, 2014, respectively, and $0.7 million and $14.1 million in non-cash charges during the three and twelve months ended December 31, 2013, respectively, related to revaluation of the PIPE warrants issued in connection with a private placement equity financing, completed in June 2012. 










(3)

Diluted net income per share for the three months ended December 31, 2013 includes the dilutive effect of warrants, stock options and stock awards outstanding of 2.7 million shares. Basic net loss per share for the year ended December 31, 2014 includes $7.0 million in non-cash income related to the revaluation of PIPE warrants, which was deducted from net loss in order to arrive at the numerator for the calculation of diluted EPS, and 0.9 million shares were added to the denominator (using the treasury stock method) to reflect the dilutive effect of the PIPE warrants. 










December 31, 2014


December 31, 2013





Selected Balance Sheet Data








Cash, cash equivalents and investments

$                  75,350


$                103,663





Total assets

86,447


110,031





Total liabilities

39,791


36,872





Total stockholders' equity 

46,656


73,159













 

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SOURCE AcelRx Pharmaceuticals, Inc.

Timothy E. Morris, Chief Financial Officer, 650.216.3511, tmorris@acelrx.com, Brian Korb, The Trout Group LLC, 646.378.2923, bkorb@troutgroup.com