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AcelRx Pharmaceuticals Reports First Quarter 2014 Financial Results

May 8, 2014

REDWOOD CITY, Calif., May 8, 2014 /PRNewswire/ — AcelRx Pharmaceuticals, Inc. (Nasdaq: ACRX), a specialty pharmaceutical company focused on the development and commercialization of innovative therapies for the treatment of acute and breakthrough pain, today reported financial results for the three months ended March 31, 2014.

“In the first quarter of the year, we have focused on preparation for commercialization of Zalviso both in the U.S. and Europe. This includes working with the FDA on the Zalviso NDA ahead of the July 27, 2014 PDUFA action date, building our commercial capabilities in anticipation of approval of Zalviso in the U.S., and working with our European commercial partner Grunenthal to prepare the MAA, including meeting with the EU regulatory authorities ahead of the anticipated MAA filing in the middle of this year,” stated Richard King, president and CEO of AcelRx. “Our principal pre-commercial activities year to date in the U.S. consist of raising awareness of Zalviso through medical meeting attendance and data presentation, completion of market sizing and segmentation work leading to sales force sizing and territory definition, and adding personnel with commercial experience. We look forward to the continuation of these efforts. In addition, we have initiated activities to allow us to advance ARX-04 into Phase 3 trials later this year.”

First Quarter Financial Results

Net loss for the first quarter of 2014 was $9.6 million, or $0.22 per share, compared to a net loss of $12.8 million, or $0.34 per share for the first quarter of 2013. The decrease in the net loss and net loss per share was due primarily to lower research and development expenses in the first quarter of 2014 as compared to the first quarter of 2013. Research and development expenses are lower in 2014 due to the completion of the pivotal studies and submission of the NDA for Zalviso in September of 2013. Common shares used in calculating basic and diluted earnings per share were 43,190,409 for the first quarter of 2014 compared to 37,133,358 for the first quarter of 2013.

During the first quarter of 2014, AcelRx recognized $95,000 of previously deferred revenue under the collaboration agreement with Grunenthal, which the company announced in December 2013, for the commercialization of Zalviso in Europe and Australia. During the first quarter of 2013, AcelRx recognized revenue of $0.9 million resulting from reimbursement for work completed under a research grant from the U.S. Army Medical Research and Materiel Command, or USAMRMC, for development of ARX-04, a sufentanil tablet product candidate for the treatment of moderate-to-severe acute pain in a range of ambulatory environments. The research grant was completed in the fourth quarter of 2013.

Research and development expenses for the quarter ended March 31, 2014 were $4.7 million, compared with $9.3 million for the quarter ended March 31, 2013. The decrease was primarily due to a high level of clinical trial activity during the quarter ended March 31, 2013, including our three Phase 3 trials for Zalviso and a Phase 2 trial for ARX-04.

General and administrative expenses were $3.9 million for the first quarter of 2014, compared with $2.2 million for the first quarter of 2013. The increase was primarily due to market research and other pre-commercial activities in preparation for potential marketing approval of Zalviso in the third quarter of this year.

Other income and expense includes a $0.7 million and $1.8 million non-cash charge in the first quarter of 2014 and 2013, respectively, resulting from the liability accounting related to the warrants issued in connection with the PIPE financing completed in June 2012. These PIPE warrants are considered a liability for accounting purposes and they are remeasured at the end of each reporting period utilizing the Black-Scholes valuation model. As of March 31, 2014, there were approximately 1.5 million PIPE warrants outstanding.

As of March 31, 2014, AcelRx had cash, cash equivalents and investments of $92.9 million, compared to $103.7 million at December 31, 2013. The net decrease in cash, cash equivalents and investments was $10.8 million in the first quarter of 2014.

Financial Outlook

AcelRx reiterates its financial guidance for the year, as follows:

    --  Research and development expenses are expected to be in the range of $27
        to $29 million for the year and relatively flat quarter over quarter.
    --  General and administrative expenses, including sales and marketing, are
        expected to be in the range of $21 to $23 million, assuming FDA approval
        for Zalviso in the third quarter of 2014.
    --  Total operating expenses for 2014 are anticipated to be in the range of
        $48 to $52 million.
    --  AcelRx believes its current cash, cash equivalents, investments and cash
        available under credit facilities are sufficient to fund operations at
        least through 2015, excluding any potential proceeds from Grunenthal
        milestones, additional financings or other corporate partnership
        proceeds.

Scientific and Investor Relation Presentations Update

AcelRx continues to raise awareness to the results of the Zalviso and ARX-04 clinical data through presentations at various medical meetings. In 2014, the company has presented posters and/or conducted symposia at a number of medical meetings, including:

    --  Association of periOperative Registered Nurses Executive Summit
    --  American Society of Regional Anesthesia and Pain Medicine
    --  American Academy of Anesthesiology Assistants
    --  American Pain Society
    --  American Society of PeriAnesthesia Nurses

Upcoming investor relations activities include participation and presentation at the following healthcare conferences:

    --  UBS Global Healthcare Conference, May 20, New York City
    --  Jefferies 2014 Global Healthcare Conference, June 3, New York City
    --  JMP Securities Healthcare Conference, June 25, New York City

Presentations will be webcast live and can be accessed through the Investors page at www.acelrx.com. For those not available to listen to the live broadcast, a replay of the presentations will be archived for 90 days.

Conference Call

AcelRx will conduct a conference call and webcast today, May 8, 2014 at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss its financial results and program updates. To listen to the conference call, dial in approximately ten minutes before the scheduled call to (877) 870-4263 for domestic callers, (855) 669-9657 for Canadian callers, or (412) 317-0790 for international callers. Those interested in listening to the conference call live via the Internet may do so by visiting the Investors section of the company’s website at www.acelrx.com and selecting the webcast link for the Q1 2014 earnings conference call. A webcast replay will be available on the AcelRx website for 90 days following the call by visiting the Investors section of the company’s website at www.acelrx.com.

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 acute and breakthrough pain. AcelRx’s lead product candidate, Zalviso(TM), is designed to improve the management of moderate-to-severe acute pain in adult patients in the hospital setting by utilizing a high therapeutic index opioid, through a non-invasive delivery route via a pre-programmed, patient-controlled analgesia device. AcelRx has announced positive results from each of the three completed Phase 3 clinical trials for Zalviso, and has submitted an NDA to the FDA seeking approval for Zalviso in the treatment of moderate-to-severe acute pain in adult patients in the hospital setting. AcelRx plans to initiate a Phase 3 clinical trial for ARX-04, a product candidate for the treatment of moderate-to-severe acute pain in a medically supervised setting, during the second half of 2014. The company has two additional pain treatment product candidates, ARX-02 and ARX-03, which have completed Phase 2 clinical development. 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 future financial results, including 2014 financial guidance and cash forecast, potential proceeds under the Grunenthal agreement, the process and timing of anticipated future development of AcelRx’s product candidates, including the timing of potential approval for Zalviso by the FDA and the timing of MAA filing for Zalviso, therapeutic and commercial potential of Zalviso and the anticipated timing, therapeutic and commercial potential of other AcelRx product candidates, including the timing of the Phase 3 trial for ARX-04. These forward-looking statements are based on AcelRx’s current expectations and inherently involve significant risks and uncertainties. AcelRx’s actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks related to: AcelRx’s ability to receive regulatory approval for Zalviso, that fact that FDA may dispute or interpret differently clinical results obtained to date or request additional clinical trials to support the NDA; any delays or inability to obtain and maintain regulatory approval of its product candidates, including Zalviso, in the United States and Europe; its ability to attract funding partners or collaborators with development, regulatory and commercialization expertise; its ability to receive any milestones or royalty payments under the Grunenthal agreement; its ability to commercialize Zalviso; its ability to obtain sufficient financing to proceed with clinical development of ARX-04 and other product candidates; the success, cost and timing of all product development activities and clinical trials, including the planned Phase 3 ARX-04 trial; the uncertain clinical development process, including the risk that clinical trials have an effective design, enroll a sufficient number of patients, or be completed on schedule, if at all; the market potential for its product candidates; the accuracy of AcelRx’s estimates regarding expenses, capital requirements and needs 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 Annual Report on Form 10-K filed with the SEC on March 17, 2014. 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

                                                            March 31,
                                                            ---------

                                                    2014                            2013
                                                    ----                            ----

    Statement of Comprehensive Loss Data

    Revenue:

    Collaboration
     agreement                                       $95     $                         -

    Research grant                                     -                             940

          Total revenue                               95                             940
                                                     ---                             ---

    Operating expenses:

    Research and
     development (1)                               4,711                           9,318

    General and
     administrative (1)                            3,925                           2,191

    Total operating
     expenses                                      8,636                          11,509
                                                   -----                          ------

    Loss from operations                          (8,541)                        (10,569)

    Interest expense                                (472)                           (454)

    Interest income and
     other income
     (expense), net(2)                              (618)                         (1,739)
                                                    ----                          ------

    Net loss                                     $(9,631)                       $(12,762)
                                                 =======                        ========

    Basic and diluted
     net loss per common
     share                                        $(0.22)                         $(0.34)

    Shares used in
     computing basic and
     diluted net loss
     per common share                             43,190                          37,133
                                                  ======                          ======

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

                Research and
                 development                        $479                            $355

                General and
                 administrative                      496                             402

                       Total                        $975                            $757
                                                    ====                            ====

    (2) Interest income and other income (expense) includes a $0.7 million and $1.8 million non-cash charge
     for the three months ended March 31, 2014 and 2013, respectively, related to warrants issued in
     connection with a private placement equity financing, completed in June 2012.

                                          March 31, 2014          December 31, 2013
                                          --------------          -----------------

    Selected Balance Sheet Data

    Cash, cash
     equivalents and
     investments                                 $92,876                        $103,663

    Total assets                                 100,417                         110,031

    Total liabilities                             35,354                          36,872

    Total stockholders'
     equity                                       65,063                          73,159

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SOURCE AcelRx Pharmaceuticals, Inc.


Source: PR Newswire



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