HAYWARD, Calif., Nov. 15, 2021 /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 announced the execution of a definitive
merger agreement to acquire Lowell Therapeutics, Inc. (Lowell), a
privately held company, and reported its third quarter 2021
financial results.
Lowell, Niyad and LTX-608 Overview
Lowell is a privately held company developing Niyad, a regional
anticoagulant for the dialysis circuit during continuous renal
replacement therapy for acute kidney injury patients in the
hospital. Niyad is being studied under an investigational device
exemption, or IDE, and has received Breakthrough Device Designation
status from the FDA. While not approved for commercial use in the
U.S., the active drug component of Niyad, nafamostat, has been
approved in Japan and South Korea as a regional anticoagulant for
the dialysis circuit, disseminated intravascular coagulation, and
acute pancreatitis. Niyad is a lyophilized formulation of
nafamostat, a broad-spectrum, synthetic serine protease inhibitor,
with anticoagulant, anti-inflammatory, and potential anti-viral
activities. The second intended indication for Niyad is as a
regional anticoagulant for the dialysis circuit for chronic kidney
disease patients undergoing intermittent hemodialysis in dialysis
centers. LTX-608 is Lowell's proprietary nafamostat formulation for
direct IV infusion being developed for the treatment of acute
respiratory distress syndrome (ARDS) and disseminated intravascular
coagulation (DIC).
The Transaction
The agreement to acquire Lowell in a transaction valued at
approximately $32.5 million plus net
cash acquired and certain other adjustments, includes approximately
$26.0 million of contingent
consideration payable in cash or stock at AcelRx's option, upon the
achievement of regulatory and sales-based milestones. The merger
consideration payable upon the closing is payable in shares of
AcelRx common stock, or at the option of certain Lowell
stockholders, in cash acquired from Lowell of up to $3.5 million to such stockholders. An amount of
shares of AcelRx common stock valued at approximately $6.5 million is expected to be issued to Lowell
securityholders at the closing. If those certain stockholders do
not elect to receive cash, the amount of shares of common stock
issued by AcelRx will be greater. The transaction was unanimously
approved by the AcelRx and Lowell
Boards of Directors and is expected to close in the fourth
quarter of 2021, subject to certain closing conditions, including
Lowell stockholder approval. Certain of Lowell's stockholders,
representing a majority of the outstanding shares of capital stock
of Lowell, have signed agreements to vote in favor of the
transaction, subject to certain conditions.
"We continue to execute on our strategy to consolidate
commercial-ready and late-stage development assets in medically
supervised settings. To that end, we recently in-licensed two
innovative pre-filled syringe products for FDA submission in 2022.
The acquisition of Lowell will provide us with a late-stage asset
that has received Breakthrough Device Designation status from the
FDA and has the potential to fulfill an unmet need for regional
anticoagulation of the dialysis circuit, an indication for which
there are currently no FDA-approved products," said Vince Angotti, Chief Executive Officer of
AcelRx. "This acquisition will further diversify AcelRx's portfolio
as this broad-spectrum, synthetic serine protease inhibitor may
have a number of other potential indications suited to medically
supervised settings. This pipeline expansion momentum comes at a
time when DSUVIA is gaining solid traction for use in the plastic
surgery and cosmetic procedure specialties, with these specialties
driving strong growth as evidenced by October being our highest
commercial order month since launch. We expect these two
specialties to be the foundation for further DSUVIA growth,"
continued Angotti.
Third Quarter and Recent Highlights
- In July 2021, AcelRx entered into
agreements with Laboratoire Aguettant (Aguettant) providing
Aguettant with a license to commercialize DZUVEO® in Europe, allowing AcelRx to receive up to
approximately $55 million in combined
up-front and sales-based milestone payments, and providing AcelRx
with two innovative pre-filled syringe product candidates for the
U.S. The expected market opportunity for these two product
candidates exceeds $100 million, and
AcelRx currently plans to file New Drug Applications for them in
2022.
- In August 2021, Azza Halim, MD and Hisham Seify, MD, PhD, FACS presented data on
the administration of sufentanil sublingual tablet 30 mcg (SST) and
its effect on reducing post-operative recovery time and opioid use
in the outpatient plastic surgery setting in patients undergoing
"awake" procedures not under general anesthesia during the Miami
Cosmetic Surgery (MCS) conference. The authors were presented with
an MCS 2021 Maverick Program Award in which the recipients'
"progressive, innovative ideas have been recognized for the lasting
impact they will have on medical aesthetics." Dr. Seify is a paid
consultant for AcelRx but was not compensated for this study. Dr.
Halim is not a paid consultant for AcelRx.
- Through October 31, 2021, AcelRx
has achieved 646 formulary approvals, exceeding year-end guidance
of 615 approvals.
Financial Information
- Cash, cash equivalents and short-term investments balance of
$48.7 million as of September 30, 2021;
- Third quarter 2021 net revenues were $1.9 million, including $1.7 million related to the $2.9 million upfront payment received from
Aguettant;
- Combined R&D and SG&A expenses for the third quarter of
2021 totaled $10.1 million compared
to $8.6 million for the third quarter
of 2020. Excluding non-cash depreciation and stock-based
compensation expense, these amounts were $8.6 million for the third quarter of 2021
compared to $7.3 million for the
third quarter of 2020. The increase in the third quarter of 2021 as
compared to the third quarter of 2020 was mainly driven by higher
SG&A costs supporting business development activities.
- For the third quarter of 2021, net loss was $8.4 million, or $0.07 per basic and diluted share, compared to
$8.9 million, or $0.10 per basic and diluted share, for the third
quarter of 2020.
Webcast and Conference Call Information
As previously
announced, AcelRx will host a live webcast Monday, November 15, 2021 at 8:00 a.m. Eastern Time (5:00 a.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, 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 and AcelRx has entered into a licensing
agreement with Laboratoire Aguettant to commercialize DZUVEO in
Europe.
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.
AcelRx has obtained the rights to file New Drug Applications (NDAs)
and, subject to U.S. Food and Drug Administration (FDA) approval,
commercialize in the U.S. two of Laboratoire Aguettant's
innovative, EU-approved, pre-filled syringe products – ready-to-use
ephedrine and phenylephrine. 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 non-cash depreciation and 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 the expected
benefits and timing of the proposed acquisition of Lowell, and the
acquisition being consummated, expected areas of growth for DSUVIA,
the expected market opportunity for product candidates of each
company, and plans to file NDAs and the timing of such filings.
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, which are predictions,
projections and other statements about future events that are based
on current expectations and assumptions. 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:
(i) the risk that the proposed acquisition may not be
completed in a timely manner or at all, which may adversely affect
AcelRx's business and the price of AcelRx's common stock;
(ii) the failure to satisfy the conditions to the consummation
of the proposed acquisition, or any effects relating to the waiver
of certain conditions; (iii) the occurrence of any event,
change or other circumstance that could give rise to the
termination of the definitive agreement to acquire Lowell or could
change the expected benefits thereof; (iv) the effect of the
announcement or pendency of the proposed acquisition on the
companies' respective business relationships, operating results and
business generally; (v) risks that the proposed acquisition
disrupts the current plans and operations of the companies;
(vi) risks relating to diverting AcelRx management's attention
from ongoing business operations; (vii) the ability of AcelRx
to implement its plans, forecasts and other expectations with
respect Lowell's business following the completion of the proposed
acquisition and realize additional opportunities for growth and
innovation; (viii) the ability to achieve the expected
benefits from the proposed acquisition; (ix) the impacts of any
breaches of representations and warranties contained in the merger
agreement and whether adequate remedies exist therefor, (x) the
risk that Lowell changes its recommendation of the transaction or
terminates the merger agreement in connection with an unsolicited
superior offer, and (xi) unexpected variations in market
growth and demand for AcelRx's and Lowell's products and
technologies. Although it is not possible to predict or identify
all such risks and uncertainties, they may include, but are not
limited to, those described under the caption "Risk Factors" and
elsewhere 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) and any subsequent public
filings. 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 new information, events or
circumstances after the date hereof, or to reflect the occurrence
of unanticipated events.
Selected Financial
Data
|
(in thousands, except
per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30
|
|
September
30
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Statement of
Comprehensive Loss Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
Product
sales
|
$
160
|
|
$
1,287
|
|
$
1,003
|
|
$
1,864
|
Contract
and other collaboration
|
1,702
|
|
81
|
|
1,813
|
|
2,814
|
Total
revenue
|
1,862
|
|
1,368
|
|
2,816
|
|
4,678
|
|
|
|
|
|
|
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
Cost of goods sold
(1)
|
439
|
|
1,851
|
|
2,519
|
|
4,732
|
Research and
development (1)
|
1,416
|
|
956
|
|
3,109
|
|
3,181
|
Selling, general and
administrative (1)
|
8,640
|
|
7,598
|
|
24,978
|
|
28,484
|
Total operating costs
and expenses
|
10,495
|
|
10,405
|
|
30,606
|
|
36,397
|
Loss from
operations
|
(8,633)
|
|
(9,037)
|
|
(27,790)
|
|
(31,719)
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
expense
|
(538)
|
|
(824)
|
|
(1,824)
|
|
(2,551)
|
Interest income and
other income (expense), net
|
32
|
|
106
|
|
92
|
|
311
|
Non-cash interest
income on liability related to sale of future royalties
|
764
|
|
825
|
|
2,345
|
|
2,502
|
Total other income
(expense)
|
258
|
|
107
|
|
613
|
|
262
|
Provision for income
taxes
|
-
|
|
-
|
|
(5)
|
|
(4)
|
Net loss
|
$
(8,375)
|
|
$
(8,930)
|
|
$
(27,182)
|
|
$
(31,461)
|
|
|
|
|
|
|
|
|
Basic and diluted net
loss per common share
|
$
(0.07)
|
|
$
(0.10)
|
|
$
(0.23)
|
|
$
(0.38)
|
|
|
|
|
|
|
|
|
Shares used in
computing basic and diluted net loss per common share
|
119,224
|
|
87,913
|
|
117,222
|
|
82,896
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Includes the following non-cash depreciation and stock-based
compensation expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
$
73
|
|
$
128
|
|
$
220
|
|
$
411
|
Research and development
|
389
|
|
188
|
|
769
|
|
572
|
Selling, general and administrative
|
1,048
|
|
1,062
|
|
3,288
|
|
3,191
|
Total
|
$
1,510
|
|
$
1,378
|
|
$
4,277
|
|
$
4,174
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2021
|
|
December 31,
2020
|
|
|
|
|
Selected Balance
Sheet Data
|
|
|
|
|
|
|
|
Cash, cash
equivalents and investments
|
$
48,699
|
|
$
42,886
|
|
|
|
|
Total
assets
|
72,263
|
|
66,295
|
|
|
|
|
Total
liabilities
|
115,284
|
|
122,045
|
|
|
|
|
Total stockholders'
deficit
|
(43,021)
|
|
(55,750)
|
|
|
|
|
Reconciliation
of Non-GAAP Financial Measures
|
|
|
|
|
|
|
(Operating
Expenses less associated depreciation and stock-based compensation
expense)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30
|
|
September
30
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
Operating expenses
(GAAP):
|
|
|
|
|
|
|
|
Research and
development
|
$
1,416
|
|
$
956
|
|
$
3,109
|
|
$
3,181
|
Selling, general and
administrative
|
8,640
|
|
7,598
|
|
24,978
|
|
28,484
|
Total operating
expenses
|
10,056
|
|
8,554
|
|
28,087
|
|
31,665
|
Less depreciation
and stock-based
|
|
|
|
|
|
|
|
compensation
expense
|
1,437
|
|
1,250
|
|
4,057
|
|
3,763
|
Operating expenses
(non-GAAP)
|
$
8,619
|
|
$
7,304
|
|
$
24,030
|
|
$
27,902
|
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SOURCE AcelRx Pharmaceuticals, Inc.