Full Press Release Details
Event Name: [ACRX] - AcelRx Q3 Financial Results
Event Date: 2014-11-10
Officers and Speakers
Tim Morris; AcelRx Pharmaceuticals, Inc.; CFO
Adrian Adams; AcelRx Pharmaceuticals, Inc.; Chairman
Richard King; AcelRx Pharmaceuticals, Inc.; President & CEO
Louise Chen, Guggenheim
Randall Stanicky, RBC Capital Markets
David Amsellem, Piper Jaffray & Co.
Boris Peaker, Cowen and Company
Ed Arce, Roth Capital Partners
Biren Amin, Jefferies & Company
Kevin Dai, Canaccord Genuity
Oren Livnat, JMP Securities
Operator: Good afternoon, and welcome to the
AcelRx Pharmaceuticals Q3 financial results conference call.
(Operator Instructions)
Please note this event is being recorded.
turn the conference over to Tim Morris. Please go ahead, sir.
Tim Morris: Thank you, Chad. Good afternoon, everyone, and welcome to today s call.
On today s call I m joined by Richard King, Chief Executive Officer, and Adrian Adams, the Chairman of the Board. In today s call we will
provide an update on the activities since the receipt of the Complete Response Letter, or CRL, for Zalviso that we received on July 25, 2014. We will discuss the progress on the European regulatory approval of Zalviso. We ll provide an
update on ARX-04. We ll review the financial results for the quarter and nine months ending September 30, 2014. We ll update our financial guidance for the remainder of 2014. And, lastly, we will take your questions.
During the call today we will make forward-looking statements, including, but not limited to, the Company s Zalviso NDA and the CRL; our plans to address
the issues raised in the CRL; our anticipated resubmission of the Zalviso NDA to the FDA, including the scope of the resubmission, the timing of the resubmission and the FDA review time; planned initiation of the Phase 3 clinical trial for ARX-04;
the therapeutic and commercial potential of AcelRx Pharmaceutical s product candidates, including Zalviso; statements related to future financial
results, including 2014 financial guidance and cash forecast; potential milestones and royalty payments out of the Grunenthal agreement; the process and timing of the submission of the marketing
authorization application, or MMA (sic, see press release - MAA), and the CE registration in the EU; and the status of the collaboration agreement with Grunenthal or any other future potential collaborations.
These forward-looking statements are based on AcelRx Pharmaceuticals current expectations and inherently involve significant risks and uncertainties.
AcelRx Pharmaceuticals 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 Pharmaceuticals ability to receive regulatory approval for Zalviso; any delays or inability to obtain and maintain regulatory approval of its product candidates, including Zalviso, in the United States and Europe; our ability to obtain
sufficient funding to commercialize Zalviso and proceed with the clinical development of ARX-04; the success, cost and timing of all product development activities and clinical trials; and other risks detailed in the risk factors and elsewhere in
AcelRx Pharmaceuticals US Securities and Exchange Commission filings and reports, including our Quarterly Report on Form 10-Q filed with the SEC on August 11, 2014.
AcelRx Pharmaceuticals undertakes no duty or obligation to update any forward-looking statement contained in this release as a result of new information,
future events or changes in its expectations.
I will now turn the call over to Adrian Adams, the Chairman of our Board of Directors.
Adrian Adams: Thank you, Tim, and good afternoon, everyone.
The Company has asked me to join the call today on behalf of the Board of Directors to comment on the announcement made last week of the departure of Richard
King, the Company s President and Chief Executive Officer. The decision made by the Board of Directors was not made lightly, and it reflects our strong desire to seek a President and Chief Executive Officer with the proven experience and
capabilities to take the Company into the next and most important phase of its evolution.
The Board of Directors has initiated a search for a new
President and Chief Executive Officer, and we are pleased that Richard has agreed to remain with the Company as President and Chief Executive Officer while the search is ongoing and until the new CEO is in place. Speaking for the Board and the whole
Company, we sincerely thank Richard for his significant contributions in leading the Company to this point, including its transition to a public company, multiple capital-raising transactions, an important partnering transaction with Grunenthal, and
the Zalviso and ARX-04 clinical developments.
Finally, I and the Board would like to emphasize that we remain confident about the Zalviso and ARX-04
development programs, the work that is being done towards a timely resubmission of the Zalviso NDA in the first quarter of 2015, and last, but certainly not least, the potential for this company to create significant shareholder value.
With that, I will now turn the call over to Richard for a discussion of the business activities and to provide a
regulatory update on Zalviso.
Richard King: Thank you very much, Adrian, and I d like to thank everyone for joining us this afternoon for this call.
I plan to address progress for Zalviso in the US and in Europe, progress on the patent front, and provide an update on status with ARX-04.
previously discussed, in the US the FDA issued a Complete Response Letter, or CRL, for the Company s NDA for Zalviso. The CRL contains requests for additional information on the Zalviso system to ensure proper use of the device. The requests
include submission of data demonstrating a reduction in the incidence of optical system errors; changes to the instructions for use for the device to address inadvertent dosing; and submission of additional data to support the shelf life of the
product, among other things.
At the end of September we held a teleconference with the FDA to review our proposed response to the Zalviso CRL. Prior to
the meeting we had provided a briefing document outlining plans for our response to the aforementioned issues in the CRL. During the teleconference with the FDA we confirmed that bench testing could be an acceptable approach to evaluate the
reduction in optical system errors, subject to agency agreement with the test protocol and the target optical system error rate. We plan to submit the bench test protocol to the agency for review and comment shortly.
The protocol will clearly delineate all planned changes to reduce the optical system error rates, including addressing specific questions raised by the agency
in its written response to the Company s proposal. To address the risk of inadvertent misplacement of tablets, we propose mitigations to the Zalviso system and IFU and to test these mitigations by way of a Human Factor Study. The protocol for
the Human Factor Study is the final stage is in the final stages of completion and will shortly be submitted to the FDA for review and comment.
the CRL the FDA specified that the appropriate test mechanism to evaluate mitigations for the inadvertent dispensing of tablets is via a Human Factor Study. We believe that the protocol we are preparing for review by the agency to evaluate the
mitigations that we propose for this issue should meet the requirements specified by the agency. At the same time as we submit the human factors protocol, and at the request of the agency, we will also provide a rationale for why clinical evaluation
of these mitigations is inappropriate and unnecessary. We hope to receive feedback on both of the items in the response from the FDA.
course, always preserves the right to decide on the adequacy of the design of a study to address any given question as well as the right to determine if the data from that study satisfactorily addresses the questions being asked. The FDA confirmed
that the review of these responses will qualify as a Class 2 review, requiring a six-month review clock. The agency also confirmed that the adequacy of the bench test study and the Human Factor Study and the results of each study will be subject to
final review and approval by the FDA.
We also proposed including additional stability data in the resubmission to support the proposed 24-month shelf
life of the Zalviso system. The FDA has agreed with this approach, subject to review of the data previously submitted and to be submitted.
communications with the FDA and subject to the timing of the FDA review and comment on protocols to be submitted for the bench testing and Human Factor Study, we are targeting resubmission of the Zalviso NDA in the first quarter of 2015. However,
depending on feedback from the FDA on the protocols and the materials to be submitted, the timing of filing of the NDA could be late in the first quarter of 2015.
Now let me turn attention to progress with Zalviso in Europe. As you are aware, we are progressing towards CE Marking the device components of the Zalviso
system. There are two stages to securing a CE Mark. The first requires AcelRx s quality systems to be ISO 13485 certified, and the second requires a technical review of the Zalviso system.
Recently, an audit of our quality systems was completed by our notified body, the British Standards Institute, with no major or minor observations recorded.
As we announced earlier today, AcelRx has now received ISO 13485 certification validating AcelRx s quality systems. This certification is the first step towards obtaining a CE Mark.
We are also pleased to confirm that BSI is in the process of reviewing the Zalviso technical file. Assuming BSI finds the technical file to be acceptable, we
anticipate obtaining a CE Mark for the Zalviso device in the near future.
Continuing with Europe, the marketing authorization application, or MAA,
review, continues in Europe through our marketing partner, Grunenthal, with 120-day questions from the EMA expected later this month. I m also pleased to announce that Grunenthal has submitted an MAA to the Swiss Agency for Therapeutic
Products, also known as Swissmedic, for Zalviso for the management of moderate to severe acute pain in adult patients in a medically supervised environment.
We are pleased with the regulatory progress Grunenthal has made with Zalviso in Europe, initially with the filing of the MAA with the EMA, and now the filing
with Swissmedic. We look forward to Swissmedic s review of the application and to the potential approval of Zalviso in Switzerland.
this year we provided an update on additions to our intellectual property portfolio. Since late last year we have received 11 issued patents, including both pharmaceutical and device patents, with a combination of composition and method claims,
which expand the scope of protection for both Zalviso and our pipeline programs. Our growing patent estate now totals 30 issued patents worldwide.
issued patents cover AcelRx s sufentanil Nanotab, medication delivery devices and platform technology, and include 13 issued US patents, four issued European patents and 13 issued patents in other international territories, including Japan and
China. These issued patents are expected to provide coverage through 2027 to 2030.
Turning attention now to ARX-04, as previously announced in June 2014 we completed a pharmacokinetic study in
support of the ARX-04 development program. In this study of healthy volunteers it was shown that two sublingual administrations of a Zalviso 15-mcg sufentanil tablet dosed 20 minutes apart were equivalent to one sublingual administration of an
ARX-04 30-mcg sufentanil tablet.
As a reminder, the total ARX-04 safety database required by the FDA is 500 patients comprised of 100 patients receiving
multiple doses of ARX-04 and 400 patients receiving a single dose. We have proposed the inclusion of approximately 300 patients from the Zalviso clinical program in the ARX-04 safety database to the FDA to partially address the 400-patient
single-dose safety database requirement. We are seeking FDA agreement on this proposal, and we have designed the two Phase 3 ARX-04 trials accordingly.
In addition, I am pleased to announce that in response to a proposal submitted earlier this year we have been notified by the Department of Defense that
AcelRx has been offered a contract to provide funding for the development of ARX-04, including funding for the proposed Phase 3 studies. We are in the process of completing the initial contracting process with the DOD, including negotiation of the
amount and timing of the contract.
Currently we plan to defer the initiation of the ARX-04 Phase 3 trials until the contract is complete. We anticipate
the contract negotiation process to conclude in the first quarter of 2015, allowing us to initiate the two Phase 3 studies shortly thereafter. However, if negotiations with the DOD become protracted, we may elect to initiate the first trial on our
own rather than sustain additional delays. However, if current negotiations are successful, we believe the contract will provide significant funding for the development of ARX-04.
On the medical affairs front, we announced the results from the IAP310 study have been published in Regional Anesthesia and Pain Medicine, or RAPM, a
peer-reviewed journal with broad, multidisciplinary readership. IAP310 was a randomized, placebo-controlled Phase 3 trial evaluating the safety and efficacy of Zalviso, also referred to as the sublingual sufentanil tablet system, or SSTS, for the
treatment of postoperative pain in patients following open abdominal surgery.
With that summary of updates, I d like to turn the call back over to