AcelRx Pharaceuticals BUY Target $ 6.00

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AcelRx Pharmaceuticals |

June 19

 

ACRX : NASDAQ : US$3.04  Buy , Target US$6.00

 

Clinical update

Reiterate BUY, $6 target on lead candidate ARX-01’s chance of success in patient controlled post-operative analgesia. ARX-01 is ACRX’s transmucosal sufentanil NanoTab-based drug-device combo-therapy for patient controlled post-operative pain. We think ARX-01’s two ongoing Ph3 trials (one vs. placebo, one vs. gold standard IV PCA morphine comparator) will yield positive data in late 2012 and the company’s final pivotal placebo-controlled trial will yield data around the end of 2012.

 AcelRx has a pipeline of drug-device combo pain relief therapies around its core NanoTab sulfentanil formulation.

Investment highlights

We expect data from first Ph3 in Q3 or early Q4/12, and data from second Ph3 in Q4/12.

So far the discontinuation rate in the pivotal placebo-controlled abdominal surgery trial has been about 33%, in line with ACRX expectations. ACRX sized the trial estimating ~20% dropout rate in the ARX-01 arm and 70% in placebo (driven by lack of benefit). In the second open-label Ph3 trial, dropouts came mostly from the IV PCA morphine arm, with very few (if any) dropouts in the ARX-01 arm.

Instrument refinement update: no malfunctions reported so far, feedback has been constructive. ACRX is receiving real time feedback on usability and function of the NanoTab delivery device, and no malfunctions have been reported so far. ACRX will incorporate feedback into a final design and start the third Ph3 trial in Q3/12 (placebo controlled orthopedic) with this final device.

Orthopedic trial will likely start early to mid Q3/12 with data around the end of 2012. This study, which will evaluate ARX-01 in post- joint-replacement pain, is enrolling more patients and will have a higher randomization ratio to overcome data variability (hip replacements tend to be less painful than knee replacements).

 

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