AcelRx Pharmaceuticals Stock: Finally, Plan B (NASDAQ:ACRX) (2024)

This article about AcelRx Pharmaceuticals, Inc. (ACRX) has three main sections:

• A short introduction of the company and its main assets – readers familiar with the company and / or my previous ACRX coverage may simply skip it.
• A discussion of the recently announced strategic turn for the company
• A deep dive into the most recently acquired asset, Nafamostat / Niyad, based on the May 04, 2022 KOL (Key Opinion Leader) event hosted by ACRX

After weighing all of those recent new insights into the company’s future path, I spent quite some time on considering my updated rating on ACRX.

Eventually, I decided to stick to my Neutral rating for the moment, simply because we do not yet know key details regarding the strategic pivoting. That said, risk-tolerant investors – and those convinced of the market potential for DSUVIA – may speculate on a deal to come that is viewed positively by the market. And as I will elaborate in the third section, I consider the potential for Nafamostat / Niyad to be more favourable than what I had thought before.

Let’s start by looking at ACRX in order to understand what the company’s commercial focus was so far and to where that may change in the foreseeable future, according to management statements made during the most recent EC (earnings call) and during a presentation given at the May 24, 2022 H.C. Wainwright Global Investment Conference (the Conference, link available for 90 days).

ACRX Business Overview

ACRX is a pharmaceutical company operating in the space of supervised medical settings, i.e. hospitals, ASCs (Ambulatory Surgical Centers), and procedural suites, such as individual dental or plastic surgeons. It does not sell its products to pharmacies or drug stores.

Currently, ACRX’ active products are limited to sublingual sufentanil tablets (or SST). The main product is called DSUVIA and is sold in the US. It is an opioid based analgetic for use against acute moderate to severe pain. It is sold to the above mentioned supervised medical institutions (referred to as Commercial Sales by management), and also to the DoD (DoD Sales), which sponsored DSUVIA's development and is anticipated to become the largest single customer in the short-term by supplying SKOs (sets, kits, and outfits) of the US Army with DSUVIA for battlefield pain management.

A detailed discussion of the features of DSUVIA, or more generally SST, can be found here.

DSUVIA is approved in Europe under the name DZUVEO, and ACRX partner with private French company Aguettant to commercialise DZUVEAU in this territory. ACRX confirmed during the EC that DZUVEOs market launch is scheduled for the third quarter of 2022, and there were no substantial additional news.

DZUVEO was sold in Europe under the name Zalviso for use through SDA (single dose applicators), but the private German commercialisation partner Grünenthal cancelled the sales agreement. Zalviso is not yet approved by the FDA for commercialisation in the US.

Further, ACRX has licensed two syringes products with Aguettant for commercialisation by ACRX in the US. These products (the Syringes) are not yet FDA approved. The limited news to report on the progress of the approval process are discussed below.

The syringes provide ephedrine and phenylephrine, substances used to regulate severe side effects that come with analgesia, i.e. products like DSUVIA. Readers more interested in these substances and Aguettant find a detailed discussion here.

Finally, in January 2022 ACRX completed the acquisition of private Lowell Therapeutics, Inc. (hereafter: Lowell). Details of the transaction are discussed here. Lowell developed a product called Niyad, a Nafamostat-based regional anticoagulant for dialysis circuit during continuous renal replacement therapy for acute kidney injury patients in the hospital. Niyad is not approved by the FDA in the US.

The third main chapter of this article will discuss the commercial environment for Nafamostat / Niyad.

Plan B

During the EC and the Conference, ACRX management spread the news that the company essentially no longer pursues to be the lead commercialisation entity for DSUVIA.

Or, in the words of CEA Vincent Angotti during the EC:

(…) we realize that in this current market environment distributes full potential as a unique analgesic can be maximized by an entity with broader resources. Accordingly, we're actively discussing strategic relationships with third parties with a more robust commercial presence that can help maximize DSUVIA’s value for all stakeholders.

And

Accordingly, to ensure value is maximized for our shareholders, we're in active discussions with more resourced, potential commercial partners to take on DSUVIA.

Now, the most obvious question is for a clarification of “take on DSUVIA”. The following response to a corresponding analyst question during the EC probably gives a good idea of what is going on:

Well, it actually runs the gamut anything from licensing in particular aspects of the market, whether it’d be a segment and procedural suites, hospital other two full divestiture of the program and we're entertaining all as we move through these discussions.

During the Conference presentation, Mr Angotti made a similar comment, which to my ears sounded more tilted towards a rather comprehensive deal – and that discussions are in progress while I am drafting this article.

What does this mean short term?

First, it means that my gut feeling expressed in the previous article was right: ACRX’ management needs to act, since the cash burn is unsustainable. I won’t (further) brag about this, because this was quite obvious to anyone capable of reading cash flow statements and doing some basic algebra.

It also means that management decided to tap the most obvious source of liquidity: DSUVIA is fully licensed in the US, it has patent protection until 2031 and it does, as I continue to believe, have a significant market opportunity in the US commercial market alone.

Here are some key recent developments that should help management to find a decent deal:

• According to management comments, DSUVIA’s US commercial (i.e. non-DoD) 1q22 sales increased by more than 60% after ~40% in previous quarters – sequentially, that is! In other words, in the first segment where DSUVIA actually got a foot on the ground (procedural suites in predominantly plastic surgery) adoption proved to pick up fast.
• Also, on May 19, 2022 ACRX reported that the FDA released some of the REMS requirements associated with DSUVIA. While this may have limited practical consequences, it could be viewed as a sign of the regulator getting more comfortable with DSUVIA.
• There is some positive news potential from Investigator Initiated studies on the effect of DSUVIA, including from renowned institutions like the Cleveland Clinic.

But to reiterate, as of this drafting, I am not aware of any specifics of such deal being public. Here is my thoughts:

• Management emphasized that they are prepared to retain the commercialisation within the procedural suites market, and in particular to continue the relationship with the DoD. In my view it makes sense to keep the DoD relationship, considering how special this is, in particular for ACRX, the company. ACRX may also pursue options with other countries’ armed forces, police units etc.
• I am not aware of any comments made by management with regards to further out-licensing deals, e.g. to the Asia-Pacific region. This is likely to depend on the partner they find and the extent of its international presence.
• I am also not aware of any comments regarding DSUVIA manufacturing, i.e. whether ACRX will be a supplier of the to-be-found commercialisation partner or partners.

Overall, I assume that we will soon hear about some sort of out-licensing deal, by which ACRX sells the right to commercialise DSUVIA to large parts of the US market at a minimum to some third party.

If it will indeed be such deal, it means one thing: ACRX sells all or most of the asset that its story was about to-date.

In a way, this is sad. ACRX burned a lot of cash, and issued a lot of shares, while failing to achieve any relevant US DSUVIA sales volumes. I have discussed the factors contributing to this development before, but there is no point in looking back right now. Plan A was to become commercially successful with DSUVIA in the US soon, and it didn’t work out. And if Plan A does not work, then it is sensible to move to Plan B:

What does this mean longer term?

The most obvious element of Plan B is to collect cash from DSUVIA, the asset. The price for the DSUVIA market share to be sold will be key, both from an operational perspective and from an investor’s perspective: The market’s view on that price will drive ACRX’ share price in the short term.

So we are left with evaluating what ACRX will do with this additional cash, which essentially means additional lifetime.

Over the last 12 months, ACRX has taken these measures to reinvent the company:

• It acquired US commercialisation licenses for the Syringes products in summer 2021 (FDA approval yet to be applied for)
• It acquired Niyad through the Lowell acquisition, completed in early 2022 (FDA approval, well, yet to be applied for – see detailed discussion below)
• It decided to further reduce the workforce, with the purpose of some USD 9 million / year cost savings

So provided the closing of a substantial DSUVIA deal, ACRX will be much less of a licensed drug commercialisation business, but rather focus on the regulatory and commercial development of some late stage assets. This is a different risk profile, and ACRX investors will need to make up their minds whether they want to stay on board.

But before I turn to what may be seen as the new focus, I want to emphasize that as usual things aren’t completely black or white here – see the following list of the commercial outlook for ACRX:

1. Supplier of DSUVIA to the DoD (most likely)
2. DSUVIA US commercialisation partner for procedural suites (more likely than not)
3. US licensor for DSUVIA (probably a combination of some unconditional one-off payment and milestone payments tied to the partner’s commercial success)
4. European Licensor for DSUVIA, and maybe even Zalviso (depends on deal, more likely to stay, since there was no comment made otherwise; recurring license fee and supply revenue, as well as milestone payments – note that ACRX reported recently that it is finally off the hook with repaying the non-recourse obligation from the Zalviso monetisation with PDL))
5. Non-US, non-Europe Licensor for DSUVIA, if anywhere (depends on deal at a minimum)
6. Ephedrine and phenylephrine syringes US commercialisation partner – a late stage asset
7. Niyad / Nafamostat US commercialisation partner – a late stage asset

We still need to learn more about the pending DSUVIA deal before we can assess the relative size of the items in the above list.

Before we move on to discuss the Niyad / Nafamostat opportunity in detail, here is the most recent statement regarding the state of affairs for the FDA approval process for the Syringes products:

We anticipate feedback from the FDA by the end of this month [that was May] on our plan for the first pre-filled syringe product candidate ephedrine or PFS-01. Assuming agreement from the FDA, we expect to submit NDAs for these two products, these two product candidates this year. With two NDAs filed in 2022, we expect to have approved products to launch next year.

Management confirmed its view regarding the market opportunity:

The market opportunity for these assets exceeds $100 million and we believe we'll be able to obtain a large share of this market with minimal commercial investment.

In this previous article I discussed the basis for management’s statement about minimal commercial investment. The short version is that both ephedrine and phenylephrine are long-established (and approved) substances in the US hospital space, and bringing them to market in a shelf-stable- ready-to-use syringe form should simply commercialisation efforts.

None of this is new, and there are no material changes to what management has discussed before.

So, I can finally turn to what is essentially my “debt” to readers of previous ACRX articles here on SA: Discussing in detail the basics of Niyad / Nafamostat and the related market opportunity.

Here we go:

Nafamostat / Niyad Deep Dive

This is a long and somewhat technical section. Readers in a hurry may simply want to take away that:

• Niyad is expected to replace existing medication against blood clotting in Renal Replacement Therapy swiftly due to significant shortcomings of the alternatives (which include no medication at all)
• On an all-cost-considered basis, Niyad is expected to be cheaper that the alternatives – and reduce risks along the recovery path
• Niyad received favourable comments from the FDA, raising hopes for an Emergency Use Authorisation, allowing revenue to commence in the second half of 2023

Introduction

As announced last year, ACRX held a KOL (Key Opinion Leader) event (hereafter: the Event) on May 4, 2022 (link here) essentially discussing the benefits of the main asset acquired through the Lowell acquisition.

The KOL’s focus was on Nafamostat, the active substance, which is trading as Niyad in a formulation relevant for dealing with blood clotting, especially in the context of RRT (Renal Replacement Therapy), both for patients with acute or chronic kidney disease.

The remainder of this section aims to summarise the key points discussed during the Event. It all started with an obvious question: What is Nafasmostat?

Well, you probably guessed it already: It is a broad spectrum serine protease inhibitor.

To cut things short here, these are molecules that are able to regulate cellular cascades within the human body, including (blood) clotting, immune reactions, and inflammation. All of these cascades are vital, but they can go awry, which can quickly create severe or even life-threatening conditions. Thus, doctors need some tool to interrupt those processes, but they need to be able to do that in a controlled manner.

The great thing about Nafamostat is that is very effective at turning down these cascades, while having a half live in the human body of just 8 minutes. This short half-life makes it easily controllable and this reduces the risk of over-dosing (and thus choking off the cascade entirely). Readers familiar with ACRX’ further offering may have made an interesting observation regarding the overall product offering by ACRX already: DSUVIA, or sublingual sufentanil, is also very much about ensuring appropriate dosing of active substances administered as part of medical treatment in a supervised medical setting.

The next thing to think about is why Niyad is so relevant in the context of RRT. As I have discussed before in brief here, during RRT blood is diverted from the human body into dialysis machines that clean the blood. The following is one of the key statements made at the Event:

When blood leaves the body, it tends to clot.

Such (RRT related) blood clotting bears several risks. First of all, uncontrolled blood clotting in the human body can have severe consequences, including thrombosis.

But even blood clotting that is contained within the dialysis machine is an adverse event. It reduces the efficiency of the blood cleaning and it reduces the life time of the filters, with the more frequent filter replacements causing higher material and staff costs in the hospitals, where nurses have become a scarce resource. Thus, a substance to avoid, or meaningfully reduce, clotting is required, and such substance is referred to as an anticoagulant.

Anticoagulation Alternatives

So, conceptually the need for an anticoagulant is as clear as it gets. However, the options available to physicians in the US are extremely limited:

• Use no anticoagulant at all – i.e. deal with the clotting risk and associated loss of blood and the adverse effect on the dialysis machines: about 60% percent of all RRT in the US
• Use Heparin – which is referred to as a systemic anticoagulant as it operates in both the machine and the patient. And this comes with its own specific and significant risks, discussed further below: about 35% of all RRT in the US
• Use Citrate – which is referred to as a regional anticoagulant as it operates in the machine only (which is good), but is very complex to use, again as discussed below: about 5% of all RRT in the US.

From a Niyad marketing perspective it is key to understand the shortcomings of the alternatives, and in particular of the two currently available alternative products. So, here we go:

Heparin – it has been around for many decades, but it bears the risk of excessive bleeding. As mentioned briefly above, Heparin does not stay in the machine, but enters the body where it stays for long, given its half-life of up to 6 hours. In the body, Heparin keeps blood from clotting, too, thereby facilitating (internal) bleeding. This is extremely dangerous for patients with the risk of (internal) bleeding, e.g. due to certain health conditions which are regularly found in those in need of RRT – and other machine support requiring blood to leave the body.

Citrate – this is the only anticoagulant available in the US that is regional, i.e. that can be kept within the machine. But it may be used only under an EUA (Emergency Use Authorisation) by the FDA. And it may only be used when following a complicated protocol and it requires a lot of training and specialization of everyone involved, from nurses to physicians.

The main reason for these many specific measures is the adverse effect that Citrate has on the calcium levels in the patient. As a consequence, these levels must be closely monitored by way of regular blood testing, in order to identify changes in calcium levels that can occur rapidly and easily create life-threatening conditions. So while advanced healthcare centres can use Citrate effectively, it remains an option with limited applicability only.

As a result of the above risks, and in the words of Dr. Chalwa, one of the expert panellists at the KOL, and a former “Professor of Medicine at the George Washington University, where he had dual appointments in the Department of Anesthesiology and Critical Care Medicine and in the Department of Medicine, Division of Renal Diseases and Hypertension”:

no anticoagulant is the default when physicians are concerned with the safety of heparin or citrate.

See Also

AcelRx Stock: Battered And Bruised But Ready For Recovery In 2022 (ACRX)

On the other hand, Niyad / Nafamostat has all the advantages of Citrate over Heparin or no anticoagulant at all. And it comes without the risks involved with the use of

• Citrate – as there is no effect on the calcium levels from Niyad;
• Heparin – as Niyad is very effectively filtered by the dialysis machine and the limited doses of Niyad that do enter the body are subject to an 8 minute half-life making it easy to control.

All of these advantages are not just marketing phrases. First, as with sufentanil, the advantages are the result of the chemical structure of the molecule. And second, Nafasmostat has been used as an anticoagulant in the RRT for up to 30 years in Japan and South Korea, where it is the standard of care. So there is tons of evidence of its efficiency and safety, see the following overview from the KOL slideset:

Given this evidence, it is no surprise that Dr. Chalwa was very optimistic for the commercialisation of Niyad once it becomes available:

Those 60% of patients with currently no anticoagulation, he believes, will rapidly be put on Niyad. He also expects Niyad to take the Heparine share, once physicians gather experience with it, an assessment based on the experience in South Korea, where Niyad is the standard of care for 30 years now.

Here, Dr. Goldstein, the other KOL and Professor of Pediatrics and Director, Center for Acute Care Nephrology at Cincinnati Children's Hospital Medical Center, added something that will be very key in a later part of my discussion:

When citrate became available in the early 2000’s in the US, within one year’s time, 80% of the paediatric RRT cases were moved to Citrate from Heparin, indicating the speed of adoption. The reason for this particular development is the higher risk for children’s health if blood clotting occurs – and the fact that in childcare it is typically easier to implement complex protocols since here anyways closer monitoring applies.

I’ll close this subsection with paraphrasing another statement from Dr. Chalwa:

No anticoagulant is a default position of desperation, when Heparine is too risky and the Citrate option is not available, e.g. at smaller healthcare centres.

There are no other options, and that is a problem, Dr. Chalwa added.

The Goldstein Study

On March 29, 2022, ACRX issued a press release, regarding a study conducted by Dr. Goldstein and others, comparing certain aspects of using Citrate in paediatric RRT in the US vs. the use of Nafamostat in paediatric RRT in Japan.

Frankly, when I read the press release back in March, I was disappointed with the result, because in essence it seemed to me that while safety was better for Nafamostat even from a layman’s perspective, the study didn’t show much of a difference with respect to the primary endpoint of the study, filter life, albeit Nafamostat showed better results at least.

However, with the insights provided during the KOL, the results from the study look much different and in fact much more favourable from a Nafamostat commercialisation perspective.

So first of all, we know already that Citrate is a very special alternative, with limited application today. So even if Nafamostat were inferior to Citrate, which it is not, this would not be a problem per se. First thing to learn for me.

Next is that even small improvements with filter life have a significant effect, especially in childcare. This is because blood loss is a more severe problem in childcare, since children lose a higher percentage of their blood. In the words of Dr. Palmer, Co-founder and Chief Medical Officer at ACRX: “Adults and children are very similar how they are treated, but children are more dicey.”

Further, in the words of Dr. Goldstein again, “the deck [i.e. the mix in the two study groups] was stacked against Nafasmostat”. Specifically, the children in the Japanese Nafasmostat group were younger, smaller and had smaller catheters, all typically leading to a relatively reduced filter life. In other words, the better filter life for Nafamostat was achieved for a group with adverse conditions.

And a final word on safety: There was not much difference with regard to bleeding, but Citrate toxicity occurred, which means that physicians had to stop using Citrate, which leaves them with the known alternatives and their respective risks, as discussed above.

Overall, while the study is helpful, it is sort of covering a niche – children treated with Citrate. And while as a father I really like to hear about any progress in that particular field, as a shareholder the overall market perspective is most relevant:

Clinical Development of Niyad in the US

There are a couple of very relevant things to specifically consider when discussion the prospects for Niyad commercialisation in the US.

First, and most importantly, Niyad received a BDD (Breakthrough Device Designation) from the FDA. This implies that the FDA treats Niyad as a “Device”, because it is actually used outside the human body and in a device. It also seems to imply that the FDA acknowledges the shortcomings of the available options discussed above.

ACRX management summarized the advantages of such designation as follows:

• Very timely communication with the FDA, which is not easy to get, e.g. much more frequent meetings.
• Easier process to e.g. use in paediatrics
• Efficient and flexible clinical study design, just one single phase III registrational study likely to suffice. And small study with 160 patients (as agreed with FDA already)
• Qualification for NTAP (new technology add-on payments), i.e. hospitals are getting what they are waiting for and the get 65% of the cost exceeding DRG covered.

The first three items simply mean that the approval process should be much faster than it would be for Niyad-a-drug.

The last item implies that when Niyad comes to the market, hospitals do not only have a better option for treatment, but they can also cover a substantial share of the cost.

Conveniently, in this context, Lowell had already applied for an ICD procedural code. This application was not only approved on the first try – also indicating that regulators see the need for alternatives – it is also not limited to RRT.

Could it get even better? It is a natural question to ask whether Niyad could get an EUA (Emergency Use Authorisation), as Citrate does. The available safety and efficiency data from Japan and South Korea would support such designation.

So the question was asked in 2021 by Lowell. And in fact the FDA made comments that do sound promising. Here is the most relevant of them given to Lowell in August 2021:

We believe that you have provided significant evidence demonstrating that the potential benefits of the Niyad device could be greater than the reasonably foreseen risks.

Before such designation will be granted, ACRX needs to produce the API (Active Pharmaceutical Substance) and show that the product is stable.

Based on all of the above ACRX management developed the following approval timeline:

Provided an actual EUA, the first Niyad revenue may be recognised by ACRX in late 2q23 or 3q23, i.e. no more than 18 months from now. The full process for the PMA (Pre-Market Authorisation – the approval process for certain “devices”) is expected to take until late 2025, which would mark the standard market entry for Niyad for use in RRT.

I am not in a position to comment on the feasibility of this timeline. But it is obvious that all practitioners on the KOL agreed that an alternative to Heparin and Citrate is needed, and there is valid evidence that the FDA shares this view.

And one comment regarding the patent situation: ACRX’ legal counsel stated that patents on Nafamostat / Niyad would hold for 20 years from the date of initial filing that was done some 3-4 years ago. Consequently, there would be patent protection some 13 years onwards from the anticipated full Niyad launch in 2025.

Finally, I ask readers to note the development cost estimate for Niyad of USD 14 million to be found at the top of the slide, as I will come back to financials soon.

But first, we need to turn to one obvious question:

If Niyad is so great - why is it not already available in the US?

This question was asked by one analyst during the call. And frankly, the answer wasn’t too clear at all to me.

Any such answer almost necessarily involves a little bit of speculation, because no one can tell exactly why other market participants did or did not do certain things.

According to Dr. Palmer, it was only Lowell who had the idea to go down the device route, which makes life simpler. Clinical studies for drugs are very expensive, and I understood from comments made during the call, that there is a variety of dialysis filters used in the US, so that other pharmaceutical companies may not have felt incentivised enough to take the risk of an approval process.

ACRX management stated more than once that they believe to have found the “needle in the haystack”, i.e. a product with a clear need and poor alternatives in a significant market – and a reasonably foreseeable and fast approval process. Unfortunately, we do not know why the previous owners of this asset decided to sell it – even though all of the above must have been known to them, too.

Cost Comparison

There is one last aspect to consider when assessing the marketability of Niyad: Cost of the product.

Dr. Chalwa estimated the cost of Niyad per day and patient at around USD 600 – but frankly, he is not an employee of ACRX, and there is more than a year to go until market entry, so we need to wait for the final number.

In any case both of the KOL’s gave their view on the cost of alternatives:

Per Dr. Goldstein, and based on real world data from the Cincinatti clinic and their pharmacy team, the total cost for regional Citrate anticoagulation NOT including nursing time to “run and trouble-shoot” is some USD 520 / day. Note that the Citrate related costs include the frequent measurement of Calcium levels. Dr. Goldstein added that he “believes” on an all-cost basis, Niyad would be substantially less expensive than Citrate.

He further mentioned that Heparin-caused bleeding comes with massive cost.

And finally Dr. Chalwa added that there is hidden cost from having blood clot, i.e. the situation mostly applying to the no-anticoagulation option: Clotting causes loss of blood, which requires transfusions, which is something physicians wouldn’t do if it is not needed – not only for the cost, but also for the burden it puts on the patient’s immune system. This is significantly affecting the patient’s health and recovery trajectory.

Again, this is much alike to the DSUVIA case: Higher nominal expense for just the active substance, expected to be compensated by lower immediate staff cost and better recovery down the road.

IV Nafamostat

There was also a very brief discussion of the potential for other uses of Nafamostat, in particular in IV-formulation, internally referred to as LTX-608 at ACRX; see as well the comments at the beginning of this section discussing the nature of Nafamostat.

I will just list the three potential uses discussed, but they are all longer shots from a commercialisation perspective. Readers interested in the short, but very interesting remarks, will find them at around 51:00 of the webcast:

• Disseminated Intravascular Coagulation (or DIC)
• Treatment of COVID and other viruses
• Acute Respiratory Distress Syndrome (or ARDS)

For these uses, the same advantage as discussed for the Niyad formulation holds: It is safe to use, and this is based on actual data from many years of widespread use in Japan and South Korea.

Conclusion

With the title of my previous ACRX coverage I stated my concerns over the visibility of ACRX’ path into the future. Well, the last 8 weeks cleared some of that fog…

That said, many key details are still unknown, most importantly the scope and price tag for the DSUVIA deal most likely to come. And frankly, I would still not be surprised to see an “all-ACRX”-deal, too.

In any case ACRX stated during the EC that they are further cutting the running cost by USD 9 million per annum. This would leave them at an annual cash burn of just below USD 30 million. Assuming the Niyad development cost of USD 14 million come on top, 3.5 years until full approval require about USD 120 million. This is before any DZUVEO milestone payments from Aguettant, before any ((cash)) contribution margin from commercial and DoD DSUVIA sales in the US, and before any contribution margin from the Syringes business, expected to start in 2023, and ignoring the net cash of some USD 20 million – it thus is a quite conservative estimate of the cash inflow required for ACRX to developing the recently added drugs and start all-over again: DSUVIA had it particular headwinds to overcome, and Niyad and the Syringes will have their own.

ACRX management expects annual revenue of up to:

• USD 100 million for the Syringes
• USD 200 million for Niyad in RRT alone

Applying a haircut of 50% and a Sales / Price ratio of 3x (large pharmaceuticals trade at 4x or more), this would – very, very roughly – turn ACRX into a USD 450 million market cap company by then (or some USD 2.50 / share at 180 million share count).

I still believe that ACRX shares provide for a lucrative risk-return profile, in particular because I believe there is potential for some news-driven sharp upside. But I do understand any investor who wants to see results first, given the essentially disappointing results with DSUVIA to-date.

Stephan Otzen