REDWOOD CITY, Calif.,
May 11, 2020 /PRNewswire/
-- AcelRx Pharmaceuticals, Inc. (Nasdaq: ACRX), (AcelRx), a
specialty pharmaceutical company focused on the development and
commercialization of innovative therapies for use in medically
supervised settings, today reported its first quarter 2020
financial results.
"During this unprecedented time, I am proud of the commitment
demonstrated by our employees as we continue making progress
towards our year-end strategic and operational 2020 goals," said
Vince Angotti, Chief Executive
Officer of AcelRx. "The Milestone C approval for DSUVIA®
in April was a significant catalyst for the Company and validates
DSUVIA's key role in modernizing the treatment of acute pain. We
expect to see a strong volume of orders from the U.S. Army
beginning later this year and into the future. The approval also
opens doors to other branches of the military, additional areas of
the Federal government, and to state governments and agencies.
Specifically, we expect the next step with the Department of
Defense will be DSUVIA's inclusion on the Joint Deployment
Formulary. We are pleased with the swift integration of our
commercial team with Tetraphase under our co-promotion agreement,
which we believe will benefit both companies moving forward."
First Quarter and Recent Highlights
- DSUVIA achieved Milestone C approval from the Department of
Defense, a decision that approves DSUVIA for use in all U.S. Army
sets, kits and outfits (SKOs) with an expectation of expanded use
across all branches of the military and the potential for use
across additional federal and state agencies. AcelRx expects that
initial stocking orders beginning later this year for U.S. Army
SKOs alone will approximate $30
million over the next three years based on troop deployment
schedules.
- Prior to the impact from the COVID-19 pandemic, AcelRx was on
pace to exceed formulary approvals and REMS-certified facilities
goals for 2020. Following the initial impact of COVID, as of
April 30, 2020, 221 healthcare
facilities are now REMS-certified and able to purchase DSUVIA and
223 formulary approvals have been achieved. As previously
communicated, in response to the COVID-19 pandemic, hospitals and
ambulatory surgery centers have restricted in-person meetings with
pharmaceutical company personnel. Accordingly, year-end 2020
REMS-certified facilities and formulary approvals goals will be
re-evaluated once COVID-19 restrictions are lifted and there is
greater visibility into healthcare facility access.
- Expect the publication of two hospital studies of real-world
data of DSUVIA in the perioperative setting which analyze DSUVIA's
impact on IV opioid requirements in the post-anesthesia care unit
(PACU) and discharge time from the PACU in the coming months.
- Announced an agreement with Brigham and Women's Hospital for an
investigator-initiated study of DSUVIA led by Richard D. Urman MD, MBA, Associate Professor of
Anesthesia and co-director of the Center for Perioperative Research
at Brigham and Women's Hospital and Harvard
Medical School. The study plans to examine the perioperative
use of DSUVIA in the analgesic regimen for spine surgery.
Financial Information
- As previously announced:
-
- Cash, cash equivalents and short-term investments balance of
$52.7 million as of March 31, 2020;
- First quarter 2020 net revenues were $0.4 million;
- Combined R&D and SG&A expenses for the first quarter of
2020 totaled $14.7 million compared
to $11.4 million for the first
quarter of 2019. Excluding stock-based compensation expense, these
amounts were $13.6 million for the
first quarter of 2020 compared to $10.3
million for the first quarter of 2019. The increase in
combined R&D and SG&A expenses is primarily due to business
development costs related to the proposed acquisition of Tetraphase
and increased personnel-related expenses for the commercial launch
of DSUVIA. See the "Reconciliation of Non-GAAP Financial Measures"
table below for a reconciliation of the non-GAAP operating expenses
described above to their related GAAP measures.
- For the first quarter of 2020, net loss was $15.9 million, or $0.20 per basic and diluted share, compared to
$13.7 million, or $0.17 per basic and diluted share, for the first
quarter of 2019.
Tetraphase Transaction Update
On March 15, 2020, AcelRx entered
into a definitive agreement (the Merger Agreement) to acquire
Tetraphase Pharmaceuticals, Inc. (Tetraphase) and a co-promotion
agreement with Tetraphase. Training of both the AcelRx and
Tetraphase teams is complete and co-promotion efforts for DSUVIA
and XERAVA™ are underway.
AcelRx is aware of the May 8, 2020
disclosure by Tetraphase indicating it received a competing
acquisition proposal from La Jolla Pharmaceutical Company
(La Jolla) that the Tetraphase
board of directors (Tetraphase Board) believes constitutes or could
reasonably be expected to lead to a superior offer. The Tetraphase
Board also stated that it continued to recommend the AcelRx merger
and has not made any recommendations with respect to the other
competing acquisition proposal by La
Jolla. Our understanding is as follows:
- The La Jolla proposal is for
an upfront value of $22 million,
payable in cash, inclusive of an estimate of approximately
$11.9 million in Black-Scholes
consideration due to select warrant holders and approximately
$10.1 million for Tetraphase common
equity holders (an implied price per share of $0.93), and contingent value rights of up to
$12.5 million.
- This compares to the AcelRx proposal for an upfront value of
approximately $21.7 million payable
in stock, based on the closing price of AcelRx stock on
May 8th, inclusive of an
estimate of approximately $11.8
million in Black-Scholes consideration due to select warrant
holders and approximately $9.9
million for Tetraphase common equity holders (an implied
price per share of $0.92), and
contingent value rights of up to $12.5
million.
Under the Merger Agreement with Tetraphase, should the
Tetraphase Board indicate that it intends to change its
recommendation in favor of the Merger Agreement, AcelRx would have
the opportunity to respond within a specified time
period.
Regardless of whether the Tetraphase Board ultimately chooses to
accept an offer (including the La
Jolla offer) other than the AcelRx transaction under the
Merger Agreement, the co-promotion agreement between the two
companies would remain in place – safeguarded by significant
financial obligations. If a party other than AcelRx ultimately
combines with Tetraphase, they will promote DSUVIA and AcelRx will
continue to promote XERAVA. AcelRx will provide additional updates
to its stockholders regarding Tetraphase at the appropriate
time.
Webcast and Conference Call Information
As previously
announced, AcelRx will host a live webcast Monday, May 11, 2020 at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss these
financial results and provide other corporate updates. The webcast
is accessible by visiting the Investors page of AcelRx's website at
www.acelrx.com and clicking on the webcast link. The webcast will
be accompanied by a slide presentation. 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. A webcast replay will
be available on the AcelRx website for 90 days following the call
by visiting the Investor page of AcelRx's website at
www.acelrx.com.
About DSUVIA (sufentanil sublingual tablet), 30
mcg
DSUVIA®, known as DZUVEO™ in Europe, approved by the FDA in November 2018, is indicated for use in adults in
certified medically supervised healthcare settings, such as
hospitals, surgical centers, and emergency departments, for the
management of acute pain severe enough to require an opioid
analgesic, and for which alternative treatments are inadequate.
DSUVIA was designed to provide rapid analgesia via a non-invasive
route and to eliminate dosing errors associated with intravenous
(IV) administration. DSUVIA is a single-strength solid dosage form
administered sublingually via a single-dose applicator (SDA) by
healthcare professionals. Sufentanil is an opioid analgesic
previously only marketed for IV and epidural anesthesia and
analgesia. The sufentanil pharmacokinetic profile
when delivered sublingually avoids the high peak plasma levels and
short duration of action observed with IV administration. The
European Commission approved DZUVEO for marketing in Europe in June
2018 and AcelRx is currently in discussions with potential
European marketing partners.
This release is intended for investors only. For more
information, including important safety information and black box
warning for DSUVIA, please visit www.DSUVIA.com.
About AcelRx Pharmaceuticals, Inc.
AcelRx
Pharmaceuticals, Inc. is a specialty pharmaceutical company focused
on the development and commercialization of innovative therapies
for use in medically supervised settings. AcelRx's
proprietary, non-invasive sublingual formulation technology
delivers sufentanil with consistent pharmacokinetic profiles.
AcelRx has one approved product in the U.S., DSUVIA®
(sufentanil sublingual tablet, 30 mcg), known as DZUVEO™
in Europe, indicated for the
management of acute pain severe enough to require an opioid
analgesic for adult patients in certified medically supervised
healthcare settings, and one product candidate, Zalviso®
(sufentanil sublingual tablet system, SST system, 15 mcg), an
investigational product in the U.S., is being developed as an
innovatively designed patient-controlled analgesia (PCA) system for
reduction of moderate-to-severe acute pain in medically supervised
settings. DZUVEO and Zalviso are both approved products in
Europe.
For additional information about AcelRx, please visit
www.acelrx.com.
Non-GAAP Financial Measures
To supplement AcelRx's
financial results and guidance presented in accordance with U.S.
generally accepted accounting principles (GAAP), AcelRx uses
certain non-GAAP financial measures in this press release, in
particular, excluding stock-based compensation expense from its
operating expenses. AcelRx believes that these non-GAAP financial
measures provide useful supplementary information to, and
facilitate additional analysis by, investors and analysts. In
particular, AcelRx believes that these non-GAAP financial measures,
when considered together with AcelRx's financial information
prepared in accordance with GAAP, can enhance investors' and
analysts' ability to meaningfully compare AcelRx's results from
period to period and to its forward-looking guidance. In addition,
these types of non-GAAP financial measures are regularly used by
investors and analysts to model and track AcelRx's financial
performance. AcelRx's management also regularly uses these non-GAAP
financial measures internally to understand, manage and evaluate
AcelRx's business and to make operating decisions. Non-GAAP
financial measures are not meant to be considered in isolation or
as a substitute for comparable GAAP measures and should be read in
conjunction with AcelRx's consolidated financial statements
prepared in accordance with GAAP. The non-GAAP financial measures
in this press release and the accompanying tables have limits in
their usefulness to investors and may be calculated differently
from, and therefore may not be directly comparable to, similarly
titled measures used by other companies.
Forward-Looking Statements
This press release
contains forward-looking statements, including, but not limited to,
statements related to anticipated procurement by the military, the
expected closing and timing and the likelihood of the Tetraphase
acquisition, expected benefits from the acquisition of Tetraphase
and the co-promotion agreement, and ongoing effects and anticipated
impacts to AcelRx's business as a result of the COVID-19
pandemic. These and any other forward-looking statements
are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. These statements
may be identified by the use of forward-looking terminology such as
"believes," "expects," "anticipates," "may," "will," "should,"
"seeks," "approximately," "intends," "plans," "estimates," or the
negative of these words or other comparable terminology. The
discussion of financial trends, strategy, plans or intentions may
also include forward-looking statements. These forward-looking
statements involve risks and uncertainties that could cause actual
results to differ materially from those projected, anticipated or
implied by such statements, including the risk that AcelRx may not
be able to close the acquisition of Tetraphase or achieve the
expected benefits and cost synergies from the transactions,
including through actions taken by competing bidders for
Tetraphase, that there may be changes in estimated cash position
based on the completion of AcelRx's financial statement closing
procedures and the review by AcelRx's independent registered public
accounting firm of such financial statements, that potential sales
volumes to the Department of Defense may not materialize, or that
the impacts AcelRx is experiencing from the ongoing COVID-19
pandemic may be prolonged or exacerbated. Although it is not
possible to predict or identify all such risks and uncertainties,
they may include, but are not limited to, those described in
AcelRx's annual, quarterly and current reports (i.e., Form 10-K,
Form 10-Q and Form 8-K) as filed or furnished with the Securities
and Exchange Commission (SEC). You are cautioned not to place undue
reliance on any such forward-looking statements, which speak only
as of the date such statements were first made. To the degree
financial information is included in this press release, it is in
summary form only and must be considered in the context of the full
details provided in AcelRx's most recent annual, quarterly or
current report as filed or furnished with the SEC. AcelRx's SEC
reports are available at www.acelrx.com under the "Investors" tab.
Except to the extent required by law, AcelRx undertakes no
obligation to publicly release the result of any revisions to these
forward-looking statements to reflect events or circumstances after
the date hereof, or to reflect the occurrence of unanticipated
events.
Additional Information and Where to Find It
In
connection with the proposed transaction between AcelRx and
Tetraphase, AcelRx filed with the SEC a registration
statement on Form S-4 (No. 333-237584) (the Registration Statement)
containing a document constituting a prospectus of AcelRx and a
proxy statement of Tetraphase. The Registration Statement was
declared effective by the SEC on April 24, 2020, and
Tetraphase mailed the definitive proxy statement/prospectus to
stockholders of Tetraphase on or about April 28, 2020. AcelRx
and Tetraphase also plan to file other relevant documents with
the SEC regarding the transaction. INVESTORS AND SECURITY
HOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT/PROSPECTUS
AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN
THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. Investors and security holders will be able
to obtain free copies of the Registration Statement and the
definitive proxy statement/prospectus and other relevant documents
filed or that will be filed by AcelRx or Tetraphase with
the SEC through the website maintained by
the SEC at http://www.sec.gov. Copies of the
documents filed with the SEC by AcelRx will be available
free of charge within the Investors section of AcelRx's website
at http://ir.acelrx.com. Copies of the documents filed with
the SEC by Tetraphase will be available free of charge
within the Investors section of Tetraphase's website
at https://ir.tphase.com/investor-relations.
Participants in the Solicitation
Each of AcelRx and
Tetraphase and their respective directors and executive officers
may be deemed to be participants in the solicitation of proxies
from Tetraphase stockholders in connection with the proposed
transaction. Information about AcelRx's directors and executive
officers is included in the definitive proxy statement for its 2020
annual meeting of stockholders, which was filed with
the SEC on April 24, 2020. Information about
Tetraphase's directors and executive officers is included in
Tetraphase's Annual Report on Form 10-K for the fiscal year
ended December 31, 2019, which was filed with
the SEC on March 12, 2020. Other information
regarding the participants in the solicitation of proxies in
connection with the proposed transaction and a description of their
direct and indirect interests, by security holdings or otherwise,
is contained in the definitive proxy statement/prospectus filed
with the SEC on April 24, 2020. When available,
investors may obtain free copies of these documents from AcelRx or
Tetraphase as indicated above.
No Offer or Solicitation
This communication is being
made in respect of the proposed transaction involving AcelRx and
Tetraphase. This communication does not constitute an offer to sell
or the solicitation of an offer to buy any securities nor a
solicitation of any vote or approval with respect to the proposed
transaction or otherwise. No offering of securities shall be made
except by means of a prospectus meeting the requirements of
Section 10 of the Securities Act of 1933, as amended, and
otherwise in accordance with applicable law.
Selected Financial
Data
|
(in thousands, except
per share data)
|
(unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
March
31
|
|
2020
|
|
2019
|
Statement of
Comprehensive Loss Data
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
Product
sales
|
$
274
|
|
$
126
|
Contract
and other collaboration
|
112
|
|
139
|
Total
revenue
|
386
|
|
265
|
|
|
|
|
Operating costs and
expenses:
|
|
|
|
Cost of goods sold
(1)
|
1,511
|
|
1,230
|
Research and
development (1)
|
1,412
|
|
1,377
|
Selling, general and
administrative (1)
|
13,311
|
|
9,976
|
Total operating costs
and expenses
|
16,234
|
|
12,583
|
Loss from
operations
|
(15,848)
|
|
(12,318)
|
|
|
|
|
Other income
(expense):
|
|
|
|
Interest
expense
|
(855)
|
|
(376)
|
Interest income and
other income (expense), net
|
(65)
|
|
627
|
Non-cash interest
income (expense) on liability related to sale of future
royalties
|
843
|
|
(1,607)
|
Total other income
(expense)
|
(77)
|
|
(1,356)
|
Net loss
|
$
(15,925)
|
|
$
(13,674)
|
|
|
|
|
Basic and diluted net
loss per common share
|
$
(0.20)
|
|
$
(0.17)
|
|
|
|
|
Shares used in
computing basic and diluted net loss per common share
|
80,057
|
|
78,789
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Includes the following non-cash, stock-based compensation
expense:
|
|
|
|
|
|
|
|
Cost of goods sold
|
$
46
|
|
$
61
|
Research and development
|
200
|
|
224
|
Selling, general and administrative
|
900
|
|
822
|
Total
|
$
1,146
|
|
$
1,107
|
|
|
|
|
|
|
|
|
|
|
March 31,
2020
|
|
December 31,
2019
|
Selected Balance
Sheet Data
|
|
|
|
Cash, cash
equivalents and investments
|
$
52,725
|
|
$
66,137
|
Total
assets
|
77,339
|
|
91,356
|
Total
liabilities
|
132,620
|
|
132,774
|
Total stockholders'
(deficit) equity
|
(55,281)
|
|
(41,418)
|
Reconciliation
of Non-GAAP Financial Measures
|
(Operating
Expenses less associated stock-based compensation
expense)
|
|
|
Three Months
Ended
|
|
March
31
|
|
2020
|
|
2019
|
|
|
|
|
Operating expenses
(GAAP):
|
|
|
|
Research and
development
|
$
1,412
|
|
$
1,377
|
Selling, general and
administrative
|
13,311
|
|
9,976
|
Total operating
expenses
|
14,723
|
|
11,353
|
Less associated
stock-based compensation expense
|
1,100
|
|
1,046
|
Operating expenses
(non-GAAP)
|
$ 13,623
|
|
$ 10,307
|
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SOURCE AcelRx Pharmaceuticals, Inc.