Recently we talked about the PDUFAs of $NEOS and $INVA, both of which received approvals for their new drugs by the FDA. While that may be the case, both were disappointing for swing traders who hadn’t bought shares 1-2 months ago and benefited from the run-up to the catalyst. The reason being is that the prices dropped after the approval, as we had warned in our article on $NEOS. If you ended up being a bag holder: not to worry. These are both excellent long term plays.
Now let’s leave the past to the past and look to the future: the PDUFAs of $ACRX and $ATRS. We’ve already covered $ATRS here, so let’s now talk about the other one.
$ACRX (AcelRx Pharmaceuticals) manufactures pain medications that treat patients with moderate to severe pain symptoms. Its drugs are intended for use only in medically supervised settings and are sublingual, meaning that they are administered by being placed under the patients’ tongues.
Currently, $ACRX has two drugs in the pipeline. The first drug is called Zalviso and is currently in Phase 3. Considering that its clinical trials so far have been successful and that the drug is already approved in Europe, its likely that it will also be approved by the FDA. While this is great news for the long term success of the company, its not the primary concern for catalyst traders right now. What we are interested in is the second pipeline drug called DSUVIA, which has a PDUFA date of October 12.
DSUVIA is a rapid-acting drug that is used in situations of serious trauma or injury. Its differentiating factor in such situations is the fact that it is sublingual (no injection required) and far more effective than its counterparts. After experiencing a trauma resulting in severe loss of blood, patients often go into a hypovolemic shock, which means that their hearts cannot pump enough blood to the body. Therefore, drugs that are administered via an intramuscular injection have a high risk of not reaching the blood stream immediately and hence not causing pain relief for the patient. On the other hand, drugs that are administered via an injection directly into the veins have the disadvantage of requiring frequent re-dosing and are usually not available in the battlefield or in an ambulatory care setting (treatment outside an hospital). Additionally, Sufentanil, the substance which is used in DSUVIA is 5-10 times more potent than its parent drug Fentanyl, and 500 times more potent than morphine.
Besides its method of administration and its effectiveness, what makes DSUVIA so special is the fact that AcelRx received funding from the US Department of Defense in order to develop this drug. If you haven’t immediately understood why that is so important, let us break it down for you. Firstly, the US military obviously wants the best for the well-being of its soldiers, and will have carefully considered which drug manufacturer to contract for the development of its drug. This tells us that they believe in the AcelRx team’s ability to successfully bring DSUVIA to the market. Secondly, given its size and scope, the US military is a huge first client to have for AcelRx (assuming that they will become a client), and acts as a guaranteed revenue source for the company before the drug has even been approved.
The military, combined with other healthcare settings including ambulatory surgical centers and emergency services, DSUVIA is estimated to have a total market size of $1.1 billion in the US alone. Remember, AcelRx has also filed for approval for DSUVIA in the European market under the name ARX-04, where the company believes that it can reach peak sales of €500 million if approved.
Currently, the share price of $ACRX is $3.35. With three weeks to go until the PDUFA date, positive approval indicators such as backing by DoD, and high public confidence (currently 100% bullish on StockTwits), we believe that there is still opportunity to start a position and make money on the run-up.
Interested in other catalysts? Check out our BioPharm Catalyst Calendar! We also have similar articles on other catalysts here. Stay tuned for more soon!