AcelRx Pharma Reports Third Quarter 2017 Financial Results

REDWOOD CITY, Calif., Nov. 9, 2017 /PRNewswire/ -- AcelRx Pharmaceuticals (Nasdaq: ACRX), (AcelRx), a specialty pharmaceutical company today reported third quarter 2017 financial results.

"In response to the DSUVIA CRL, we are pleased to have compiled and submitted the Briefing Book and request for a Type A meeting with the FDA. Our goal is to have this meeting scheduled before the end of the year to provide clarity on our path towards DSUVIA NDA resubmission," stated Vince Angotti, AcelRx's chief executive officer. "DSUVIA remains our core asset as we believe the recommendations in the CRL are manageable. In addition, we successfully completed the ZALVISO Phase 3 study requested by the FDA, and remain focused on providing physicians and patients with non-invasive pain management options for moderate-to-severe acute pain within medically supervised settings. We also reduced our cash spending during the quarter, and plan to continue our prudent cash management in the coming quarters to maintain our solid liquidity position."

Recent Highlights

• Reported successful outcome of ZALVISO Phase 3 IAP312 study on device functionality, achieving the study objective with 2.2% of patients experiencing a device error, which was statistically less than the 5% limit specified in the study objective.
• On track for the resubmission of the NDA for ZALVISO by the end of the year with the intention to resubmit after the DSUVIA Type A meeting.
• Received a CRL in October 2017 from the FDA regarding its NDA for DSUVIA. A Type A meeting request was submitted to the FDA to discuss the topics covered in the CRL and to confirm plans to move towards resubmission of the DSUVIA NDA.

Third Quarter 2017 Financial Information

• September 30, 2017 cash balance of $67.9 million.
• Revenue of $1.5 million, consisting of $1.2 million related to the collaboration with Grunenthal, and $0.3 million related to work performed under the Department of Defense (DoD) contract for DSUVIA. The $1.9 million decline from the third quarter of 2016 is mainly attributed to lower invoicing under our DoD contract due to less DSUVIA development work in the quarter.
• Cost of goods sold of $2.0 million related to commercial production of ZALVISO in support of Grunenthal's European launch, as compared to $2.6 million during the third quarter of 2016.
• R&D and G&A expenses totaled $8.3 million, and excluding stock-based compensation was $7.4 million, declining $0.4 million compared to the third quarter of 2016. The decrease was mainly due to the completion of the Phase 3 DSUVIA trials in 2016, and lower ZALVISO-related development costs offset by an increase in DSUVIA-related pre-commercialization expenses.
• Net loss for the third quarter of 2017 was $13.0 million, or $0.28 basic and diluted net loss per share, compared to $11.4 million, or $0.25 basic and diluted net loss per share for the third quarter of 2016. The net loss from operations in the third quarter of 2017 was $8.9 million, compared to $8.0 million during the third quarter last year.

Year-to-Date Financial Information

• For the nine months ended September 30, 2017, revenue of $7.2 million, consisting of $6.4 million under the collaboration agreement with Grunenthal, and $0.8 million related to work performed under the Department of Defense contract for DSUVIA. This compares to revenue related to those two agreements of $4.7 million and $6.2 million, respectively, for the nine months ended September 30, 2016. Higher ZALVISO product sales to Grunenthal were offset by the timing of DSUVIA development work reimbursed under our contract with the DoD.
• Cost of goods sold of $9.7 million related to the production of ZALVISO for Grunenthal's European launch, as compared to $9.2 million in the comparable period last year.
• R&D and G&A expenses totaled $28.4 million, and excluding stock-based compensation was $25.4 million, in the nine months ended September 30, 2017, compared to $26.6 million, and excluding stock-based compensation was $23.4 million, during the nine months ended September 30, 2016. The increase was primarily due to the IAP312 clinical trial for ZALVISO and DSUVIA-related pre-commercialization expenses.
• Net loss of $41.6 million, or $0.91 basic and diluted net loss per share, compared to $33.5 million, or $0.74 basic and diluted net loss per share for the same period in 2016.

Conference Call
As previously announced, AcelRx will conduct an investment-community conference call on Thursday, November 9, 2017 at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss these financial results. Investors who wish to participate in the conference call may do so by dialing (866) 361-2335 for domestic callers, (855) 669-9657 for Canadian callers or (412) 902-4204 for international callers. Those interested in listening to a webcast of the conference call live via the Internet may do so by visiting the Investors page of the company's website at www.acelrx.com and clicking on the webcast link on the Investors home page. The webcast will be archived on the AcelRx website for 90 days following the call.

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 moderate-to-severe acute pain. AcelRx's proprietary, non-invasive sublingual formulation technology delivers sufentanil with consistent pharmacokinetic profiles. The company has two product candidates including 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, and ZALVISO^® (sufentanil sublingual tablet system, SST system, 15 microgram) being developed as an innovatively designed patient-controlled analgesia (PCA) system for reduction of moderate-to-severe acute pain in medically supervised settings.

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 the process and timing of anticipated future development of AcelRx's product candidates, DSUVIA^™ (sufentanil sublingual tablet, 30 mcg), known as ARX-04 outside the United States, and ZALVISO^® (sufentanil sublingual tablet system), including U.S. Food and Drug Administration, or FDA, review of the New Drug Application, or NDA, for DSUVIA; evaluation of the CRL and AcelRx's plans for resubmission of the NDA for DSUVIA with the FDA; the timing of the planned resubmission of the ZALVISO NDA; and the Company's ability to continue its cash management plan and maintain a solid liquidity position. These forward-looking statements are based on AcelRx Pharmaceuticals' current expectations and inherently involve significant risks and uncertainties. AcelRx Pharmaceuticals' actual results and timing of events could differ materially from those anticipated in such forward-looking statements, and as a result of these risks and uncertainties, which include, without limitation, risks related to AcelRx Pharmaceuticals' DSUVIA and ARX-04 development programs, including EMA review of the ARX-04 MAA, and the possibility that EMA may dispute or interpret differently clinical results obtained from the ARX-04 Phase 2 and 3 studies; the possibility that the FDA may dispute or interpret differently the results of the ZALVISO development program, including the results from the IAP312 clinical trial; the resubmission of the ZALVISO NDA to the FDA; any delays or inability to obtain and maintain regulatory approval of its product candidates, including DSUVIA in the United States, ARX-04 in Europe and ZALVISO in the United States; the uncertain clinical development process, including adverse events; the success, cost and timing of all development activities and clinical trials; the accuracy of AcelRx's estimates regarding expenses, capital requirements and the need for financing; and other risks detailed in the "Risk Factors" and elsewhere in AcelRx's U.S. Securities and Exchange Commission filings and reports, including its Quarterly Report on Form 10-Q filed with the SEC on August 2, 2017. AcelRx 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                                 Nine Months Ended

                                                         September 30                                        September 30
                                                       ------------                                    ------------

                                                               2017                             2016                     2017                    2016
                                                               ----                             ----                     ----                    ----

    Statement of Comprehensive Loss Data


    Revenue:

    Collaboration agreement
     revenue                                                 $1,225                           $1,562                   $6,444                  $4,669

    Contract and other
     revenue                                                    262                            1,804                      811                   6,253

          Total revenue                                       1,487                            3,366                    7,255                  10,922
                                                              -----                            -----                    -----                  ------


    Operating costs and expenses:

    Cost of goods sold (1)                                    2,029                            2,579                    9,697                   9,154

    Research and development
     (1)                                                     3,913                            4,617                   15,733                  15,068

    General and
     administrative (1)                                       4,406                            4,145                   12,700                  11,519

    Total operating costs and
     expenses                                                10,348                           11,341                   38,130                  35,741
                                                             ------                           ------                   ------                  ------

    Loss from operations                                    (8,861)                         (7,975)                (30,875)               (24,819)


    Other (expense) income:

    Interest expense                                          (919)                           (702)                 (2,596)                (2,069)

    Interest income and other
     income (expense), net(2)                                 (465)                           (360)                   (215)                    300

    Non-cash interest
     expense on liability
     related to sale of
     future royalties                                       (2,768)                         (2,401)                 (7,935)                (6,921)
                                                             ------                           ------                   ------                  ------

    Total other expense                                     (4,152)                         (3,463)                (10,746)                (8,690)
                                                             ------                           ------                  -------                  ------

    Benefit (provision) for
     income taxes                                                 -                              36                      (2)                     34

    Net loss                                              $(13,013)                       $(11,402)               $(41,623)              $(33,475)
                                                           ========                         ========                 ========                ========


    Basic and diluted net
     loss per common share                                  $(0.28)                         $(0.25)                 $(0.91)                $(0.74)


    Shares used in computing
     basic and diluted net
     loss per common share                                   46,365                           45,319                   45,701                  45,306
                                                             ======                           ======                   ======                  ======



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


                Cost of goods sold                              $80                              $77                     $243                    $225

                Research and development                        458                              560                    1,442                   1,746

                General and
                 administrative                                 480                              441                    1,555                   1,437

                       Total                                 $1,018                           $1,078                   $3,240                  $3,408
                                                             ======                           ======                   ======                  ======


    (2)  Interest income and other income (expense) includes $0.6 million and $0.4 million in non-cash charges for the three months ended September 30, 2017 and 2016, respectively, and $0.4 million in non-
     cash charges and $0.1 million in non-cash income for the nine months ended September 30, 2017 and 2016, respectively, related to warrants issued in connection with a private placement equity
     financing, completed in June 2012.


                                                September 30, 2017               December 31, 2016
                                                ------------------               -----------------

    Selected Balance Sheet Data

    Cash and cash equivalents                               $67,936                          $80,310

    Total assets                                             82,743                           99,993

    Total liabilities                                       113,052                          105,330

    Total stockholders'
     deficit                                               (30,309)                         (5,337)

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SOURCE AcelRx Pharmaceuticals, Inc.