Sarepta, AcelRx Look to Infuse Some Cash into Their Pipelines

Stock market chart showing a rebound

Two companies, Sarepta Therapeutics and AcelRx Pharmaceuticals, are offering shares of common stock to provide an infusion of cash to help with the development of pipeline products and support approved products.

Fresh off the heels of the regulatory approval for Dsuvia, a powerful sublingual opioid pain treatment, California-based AcelRx Pharmaceuticals secured $40 million in the sale of 12,698,412 shares of its common stock.  

The company announced the stock sale this morning. The offering, which is at a price of $3.15 per share, is expected to close on Nov. 14, the company said. Underwriters have been given a 30-day option to purchase an additional 1,904,761 shares of the common stock. AcelRx intends to use the proceeds from the offering, as well as its existing cash resources, to fund the commercial launch of Dsuvia and for general corporate purposes.

Dsuvia was approved on Nov. 2 by the U.S. Food and Drug Administration. The drug was for the management of acute pain in adults that is severe enough to require an analgesic in certified medically supervised healthcare settings, such as hospitals, surgical centers and emergency departments. Dsuvia is reportedly 1,000 times more powerful than morphine. The medication is in tablet form and is meant to be used in a medically supervised setting. However, there is significant concern that the drug could be abused by addicts, particularly in the light of the opioid epidemic sweeping the United States. AcelRx plans to launch Dsuvia in the first quarter of 2019.

Following the FDA approval of Dsuvia, shares of AcelRx jumped to a year high of $4.80, well above the $3.15 price of the current offering. However, shares have fallen significantly since then. Today, one week after the approval of Dsuvia, shares are down 17 percent to $3.22 per share.

While AcelRx is only eying $40 million, Sarepta is hoping to bank $500 million with its sale of 3,817,000 shares of its common stock at a price of $131 per share. In addition, Sarepta has granted the underwriters a 30-day option to purchase up to an additional 572,550 shares of its common stock on the same terms and conditions as the initial shares.

Sarepta said it intends to use the $500 million it hopes to secure from the offering for the “continuation and initiation of further clinical trials, commercialization, manufacturing, business development activities including the potential licensing or acquisition of complementary products and technologies and other general corporate purposes.”

Since Sarepta announced the sale of that block of shares, the stock price has fallen more than 5 percent to $126.32. The stock hit a year high of $161.51 in September, days after the FDA lifted the clinical hold for the company's Duchenne muscular dystrophy (DMD) micro-dystrophin gene therapy program. The FDA placed the program on clinical hold in July due to the presence of trace amounts of DNA fragment in research-grade third-party supplied plasmid in a manufacturing lot.

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