AcelRx' shares plummet on FDA rejection of Zalviso drug-device combination

Shares in AcelRx fell as much as 35 percent Monday after the company said the FDA denied its application to market the patient-activated sublingual analgesic system Zalviso (sufentanil) for the management of moderate-to-severe acute pain in adults in the hospital setting. According to AcelRx, while the agency's complete response letter requested more information on the drug-dispensing system to ensure proper use of the device, it did not ask for the drugmaker to conduct additional clinical studies.

Specifically, the FDA requested bench data showing a reduction in the incidence of "optical system errors," referring to an optical sensor in the device that indicates whether the drug cartridge has been tampered with and thus needs to be changed. The company said the optical error rate observed in Zalviso clinical trials was in the "single digits" without providing further specifics, adding that it plans to improve the dispensing rod in the device and conduct the requested bench testing. The regulator also asked for changes to the product's instructions for use, as well as additional data to support its shelf life. AcelRx said some of the requested data had already been submitted to the FDA, but had yet to be reviewed by the agency.

CEO Richard King stated "we believe we can satisfy all of the FDA's requests…and resubmit the [application] by the end of 2014." Commenting on the news, analysts suggested the issues cited by the regulator were "rather mild," with analysts predicting the rejection would likely delay the launch of Zalviso by one year.

Oren Livnat of JMP Securities noted AcelRx "was surprised to receive a [complete response letter] for issues it believes could have been resolved with a routine PDUFA delay," given that the letter "almost exclusively [deals with] straightforward device and instruction issues rather than drug concerns." He added that "this increases our overall confidence in approvability." Meanwhile, Roth Capital Partners analyst Ed Arce said the rejection may give The Medicines Company's experimental transdermal analgesic system Ionsys (fentanyl) "at least a two-month head start on Zalviso." Additionally, RBC Capital Markets lowered their 2021 sales forecast for AcelRx' therapy in the US by $50 million to $350 million.

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