AcelRx discusses sublingual painkiller's rejection with concerned investors

On the heels of FDA's rejection of the AcelRx ($ACRX) New Drug Application for the sublingually delivered postoperative pain killer Zalviso, CEO Richard King expounded on the "optical system errors" of the opioid drug's handheld, preprogrammed delivery device during a July 28 conference call with investors.

King said he thought the problem could be solved after commercialization, but FDA didn't feel the same way according to its July 25 Complete Response Letter to AcelRx, whose stock price subsequently plunged by 30%. He said that the issues are minor and the company plans to resubmit its NDA by the end of the year, following a meeting with the agency. King said the company may have addressed some of FDA's concerns in amendments to the submission that FDA had not reviewed before they sent the Complete Response Letter.

The FDA's biggest complaint was the rate of optical system errors, which King said were in the single digits. He explained that an optical system reads the tablets and a priming cap to ensure that patients are dosed properly. He said, "Optical errors are not dangerous, but rather they are a built-in safety feature designed to ensure proper dispensing of tablets from untampered cartridges," and require the replacement of the drug cartridge or the entire system in order to proceed. The system helps prevent against diversion of the synthetic opioid-based drug for abusive purposes, he said.

The CEO believes that the optical error rate can be reduced to a "very low rate" by reducing the friction of the dispensation mechanism, and said the fix is "already under way." Additional bench data on the new design will be included in the resubmission.

Another concern raised by the FDA was misplaced tablets. During clinical trials there were 15 misplaced tablets out of about 30,000, he said. FDA wants the problem to be addressed in the product's instructions for use, and human factor testing may be required to test those instructions, King said.

AcelRx will end Q2 with a little more than $90 million in cash, and has enough funding for at the least next two years based on a burn rate of $12 million per quarter, King said.

Wall Street and the company expected approval. In May AcelRx committed to renting out another building and hiring a number of people in anticipation of the now-delayed launch according to the San Francisco Business Times. King said during the call that a number of managers had already been hired, but the hiring of sales reps has been put on hold. "We previously had talked about a time point from approval to launch of about 6 months," the CEO said, adding that the company will use the delay to continue to refine its commercialization approach prior to approval. A CE mark filing in Europe is also anticipated this year.

AcelRx hopes to enter market for postoperative patient-controlled analgesia with Zalviso, which it says offers an alternative to intravenously delivered morphine or hydromorphone--a method of pain relief that the AcelRx website says has an error rate of about 4% among treated patients.

- read the release
- read the San Francisco Business Times article
- listen to the conference call (reg. req.)