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AcelRx Pharmaceuticals Reports First Quarter 2020 Financial Results
"During this unprecedented time, I am proud of the commitment demonstrated by our employees as we continue making progress towards our year-end strategic and operational 2020 goals," said
First Quarter and Recent Highlights
- DSUVIA achieved Milestone C approval from the
Department of Defense , a decision that approves DSUVIA for use in allU.S. Army sets, kits and outfits (SKOs) with an expectation of expanded use across all branches of the military and the potential for use across additional federal and state agencies. AcelRx expects that initial stocking orders beginning later this year forU.S. Army SKOs alone will approximate$30 million over the next three years based on troop deployment schedules. - Prior to the impact from the COVID-19 pandemic, AcelRx was on pace to exceed formulary approvals and REMS-certified facilities goals for 2020. Following the initial impact of COVID, as of
April 30, 2020 , 221 healthcare facilities are now REMS-certified and able to purchase DSUVIA and 223 formulary approvals have been achieved. As previously communicated, in response to the COVID-19 pandemic, hospitals and ambulatory surgery centers have restricted in-person meetings with pharmaceutical company personnel. Accordingly, year-end 2020 REMS-certified facilities and formulary approvals goals will be re-evaluated once COVID-19 restrictions are lifted and there is greater visibility into healthcare facility access. - Expect the publication of two hospital studies of real-world data of DSUVIA in the perioperative setting which analyze DSUVIA's impact on IV opioid requirements in the post-anesthesia care unit (PACU) and discharge time from the PACU in the coming months.
- Announced an agreement with
Brigham and Women's Hospital for an investigator-initiated study of DSUVIA led byRichard D. Urman MD, MBA, Associate Professor of Anesthesia and co-director of theCenter for Perioperative Research atBrigham and Women's Hospital andHarvard Medical School . The study plans to examine the perioperative use of DSUVIA in the analgesic regimen for spine surgery.
Financial Information
- As previously announced:
- Cash, cash equivalents and short-term investments balance of
$52.7 million as ofMarch 31, 2020 ; - First quarter 2020 net revenues were
$0.4 million ; - Combined R&D and SG&A expenses for the first quarter of 2020 totaled
$14.7 million compared to$11.4 million for the first quarter of 2019. Excluding stock-based compensation expense, these amounts were$13.6 million for the first quarter of 2020 compared to$10.3 million for the first quarter of 2019. The increase in combined R&D and SG&A expenses is primarily due to business development costs related to the proposed acquisition of Tetraphase and increased personnel-related expenses for the commercial launch of DSUVIA. See the "Reconciliation of Non-GAAP Financial Measures" table below for a reconciliation of the non-GAAP operating expenses described above to their related GAAP measures. - For the first quarter of 2020, net loss was
$15.9 million , or$0.20 per basic and diluted share, compared to$13.7 million , or$0.17 per basic and diluted share, for the first quarter of 2019.
Tetraphase Transaction Update
On
AcelRx is aware of the
- The La Jolla proposal is for an upfront value of
$22 million , payable in cash, inclusive of an estimate of approximately$11.9 million in Black-Scholes consideration due to select warrant holders and approximately$10.1 million for Tetraphase common equity holders (an implied price per share of$0.93 ), and contingent value rights of up to$12.5 million . - This compares to the AcelRx proposal for an upfront value of approximately
$21.7 million payable in stock, based on the closing price of AcelRx stock onMay 8 th, inclusive of an estimate of approximately$11.8 million in Black-Scholes consideration due to select warrant holders and approximately$9.9 million for Tetraphase common equity holders (an implied price per share of$0.92 ), and contingent value rights of up to$12.5 million .
Under the Merger Agreement with Tetraphase, should the Tetraphase Board indicate that it intends to change its recommendation in favor of the Merger Agreement, AcelRx would have the opportunity to respond within a specified time period.
Regardless of whether the Tetraphase Board ultimately chooses to accept an offer (including the La Jolla offer) other than the AcelRx transaction under the Merger Agreement, the co-promotion agreement between the two companies would remain in place – safeguarded by significant financial obligations. If a party other than AcelRx ultimately combines with Tetraphase, they will promote DSUVIA and AcelRx will continue to promote XERAVA. AcelRx will provide additional updates to its stockholders regarding Tetraphase at the appropriate time.
Webcast and Conference Call Information
As previously announced, AcelRx will host a live webcast
About DSUVIA (sufentanil sublingual tablet), 30 mcg
DSUVIA®, known as DZUVEO™ in
This release is intended for investors only. For more information, including important safety information and black box warning for DSUVIA, please visit www.DSUVIA.com.
About
For additional information about AcelRx, please visit www.acelrx.com.
Non-GAAP Financial Measures
To supplement AcelRx's financial results and guidance presented in accordance with
Forward-Looking Statements
This press release contains forward-looking statements, including, but not limited to, statements related to anticipated procurement by the military, the expected closing and timing and the likelihood of the Tetraphase acquisition, expected benefits from the acquisition of Tetraphase and the co-promotion agreement, and ongoing effects and anticipated impacts to AcelRx's business as a result of the COVID-19 pandemic. These and any other forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking terminology such as "believes," "expects," "anticipates," "may," "will," "should," "seeks," "approximately," "intends," "plans," "estimates," or the negative of these words or other comparable terminology. The discussion of financial trends, strategy, plans or intentions may also include forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied by such statements, including the risk that AcelRx may not be able to close the acquisition of Tetraphase or achieve the expected benefits and cost synergies from the transactions, including through actions taken by competing bidders for Tetraphase, that there may be changes in estimated cash position based on the completion of AcelRx's financial statement closing procedures and the review by AcelRx's independent registered public accounting firm of such financial statements, that potential sales volumes to the
Additional Information and Where to Find It
In connection with the proposed transaction between AcelRx and Tetraphase, AcelRx filed with the SEC a registration statement on Form S-4 (No. 333-237584) (the Registration Statement) containing a document constituting a prospectus of AcelRx and a proxy statement of Tetraphase. The Registration Statement was declared effective by the SEC on April 24, 2020, and Tetraphase mailed the definitive proxy statement/prospectus to stockholders of Tetraphase on or about April 28, 2020. AcelRx and Tetraphase also plan to file other relevant documents with the SEC regarding the transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders will be able to obtain free copies of the Registration Statement and the definitive proxy statement/prospectus and other relevant documents filed or that will be filed by AcelRx or Tetraphase with the SEC through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by AcelRx will be available free of charge within the Investors section of AcelRx's website at http://ir.acelrx.com. Copies of the documents filed with the SEC by Tetraphase will be available free of charge within the Investors section of Tetraphase's website at https://ir.tphase.com/investor-relations.
Participants in the Solicitation
Each of AcelRx and Tetraphase and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from Tetraphase stockholders in connection with the proposed transaction. Information about AcelRx's directors and executive officers is included in the definitive proxy statement for its 2020 annual meeting of stockholders, which was filed with the SEC on April 24, 2020. Information about Tetraphase's directors and executive officers is included in Tetraphase's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, which was filed with the SEC on March 12, 2020. Other information regarding the participants in the solicitation of proxies in connection with the proposed transaction and a description of their direct and indirect interests, by security holdings or otherwise, is contained in the definitive proxy statement/prospectus filed with the SEC on April 24, 2020. When available, investors may obtain free copies of these documents from AcelRx or Tetraphase as indicated above.
No Offer or Solicitation
This communication is being made in respect of the proposed transaction involving AcelRx and Tetraphase. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities nor a solicitation of any vote or approval with respect to the proposed transaction or otherwise. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.
Selected Financial Data |
|||
(in thousands, except per share data) |
|||
(unaudited) |
|||
Three Months Ended |
|||
|
|||
2020 |
2019 |
||
Statement of Comprehensive Loss Data |
|||
Revenue: |
|||
Product sales |
$ 274 |
$ 126 |
|
Contract and other collaboration |
112 |
139 |
|
Total revenue |
386 |
265 |
|
Operating costs and expenses: |
|||
Cost of goods sold (1) |
1,511 |
1,230 |
|
Research and development (1) |
1,412 |
1,377 |
|
Selling, general and administrative (1) |
13,311 |
9,976 |
|
Total operating costs and expenses |
16,234 |
12,583 |
|
Loss from operations |
(15,848) |
(12,318) |
|
Other income (expense): |
|||
Interest expense |
(855) |
(376) |
|
Interest income and other income (expense), net |
(65) |
627 |
|
Non-cash interest income (expense) on liability related to sale of future royalties |
843 |
(1,607) |
|
Total other income (expense) |
(77) |
(1,356) |
|
Net loss |
$ (15,925) |
$ (13,674) |
|
Basic and diluted net loss per common share |
$ (0.20) |
$ (0.17) |
|
Shares used in computing basic and diluted net loss per common share |
80,057 |
78,789 |
|
(1) Includes the following non-cash, stock-based compensation expense: |
|||
Cost of goods sold |
$ 46 |
$ 61 |
|
Research and development |
200 |
224 |
|
Selling, general and administrative |
900 |
822 |
|
Total |
$ 1,146 |
$ 1,107 |
|
|
|
||
Selected Balance Sheet Data |
|||
Cash, cash equivalents and investments |
$ 52,725 |
$ 66,137 |
|
Total assets |
77,339 |
91,356 |
|
Total liabilities |
132,620 |
132,774 |
|
Total stockholders' (deficit) equity |
(55,281) |
(41,418) |
Reconciliation of Non-GAAP Financial Measures |
|||
(Operating Expenses less associated stock-based compensation expense) |
|||
Three Months Ended |
|||
|
|||
2020 |
2019 |
||
Operating expenses (GAAP): |
|||
Research and development |
$ 1,412 |
$ 1,377 |
|
Selling, general and administrative |
13,311 |
9,976 |
|
Total operating expenses |
14,723 |
11,353 |
|
Less associated stock-based compensation expense |
1,100 |
1,046 |
|
Operating expenses (non-GAAP) |
|
|
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SOURCE
Media Contacts: Evoke, Theresa Dolge / Jessica Ross, 215-928-2748 / 215-928-2346, theresa.dolge@evokegroup.com / jessica.ross@evokegroup.com, or Sloane & Company, Dan Zacchei / Joe Germani, Dzacchei@sloanepr.com / JGermani@sloanepr.com, or Investor Contacts: Raffi Asadorian, CFO AcelRx, investors@acelrx.com, Brian Korb, Solebury Trout, 646-378-2923, Investors@acelrx.com