AcelRX Shares Should More Than Double On Painkiller Assets, Landenburg Says In Bullish Initiation

AcelRx Pharmaceuticals Inc (NASDAQ: ACRX), with two product candidates in its pipeline, is a specialty pharma company focusing on pain management therapies.

The Analyst

Landenburg Thalmann analyst Michael Higgins initiated coverage of AcelRx with a Buy rating and $7 price target.

The Thesis

The company's lead candidate Dsuvia, a 30mcg sufentanil NanoTab placed sublingually by a health care professional via a single-dose applicator, is being touted as a substitute for intravenous opioids, currently the gold standard to treat moderate-to-severe pain in emergency departments, Higgins said in a Thursday note.

The other pipeline asset is Zalviso 15mcg, placed under the tongue by devices controlled by a health care practitioner, the analyst said.

Both the assets have been approved in Europe but have received complete response letters in the U.S. The initial review and CRL have reduced regulatory risks for Dsuvia, Higgins said, adding that he expects the drug to become ubiquitous in some ERs given its risk and tolerability profile. 

"For Zalviso, device improvements have been tested and validated in a post-CRL Phase 3 trial," the analyst said. 

Ladenburg Thalmann projects that an emergency department shortage and shortage of IV opioids will lead to a higher rate of adoption for Dsuvia than the Street expects. 

The firm estimates Dsuvia's market share to cross 2 percent in 2021, and subsequently increase to 12 percent in 2029, with peak revenue of more than $500 million.

"Our Zalviso outlook is more modest as we look for $200 million in peak revenues but for $50 million in 2022 revenues to boost AcelRx's profitability," Higgins said. 

Dsuvia's Adcom, PDUFA and launch updates are the next key events AcelRX, the analyst said. 

The Price Action

AcelRX shares were rallying nearly 6 percent to $3.12 at the time of publication Thursday.

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