Please ensure Javascript is enabled for purposes of website accessibility

Here's Why AcelRx Pharmaceuticals Fell as Much as 14% Today

By Maxx Chatsko - Updated May 9, 2019 at 12:49PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The pharma announced first-quarter 2019 operating results.

What happened

Shares of AcelRx Pharmaceuticals (ACRX 3.23%) dropped 14% today after the company announced first-quarter 2019 operating results. The business reported revenue that was well behind Wall Street estimates. More importantly, generating revenue of only $265,000 for the quarter suggests the company's sole drug product, Dsuvia, had a very slow start. 

While the pain treatment only launched in late February, it generated just $47,000 in revenue in the five weeks it was available. Wall Street estimates suggest analysts were expecting nearly 10 times that amount after accounting for grant revenue, according to numbers compiled by Yahoo! Finance. What's more, AcelRx Therapeutics reported $1.2 million in cost of goods sold.

As of 12:24 p.m. EDT, the stock had settled to a 7.9% loss.

A scientist sitting in a lab with his left hand on his forehead and a disappointed look on his face..

Image source: Getty Images.

So what

It's still very early for Dsuvia, which some analysts believe has immense potential as a rapid-acting, oral treatment for pain in hospital settings. Clinical results and marketing approvals powered the company's stock to nearly 140% year-to-date gains at one point in 2018, but shares finished the year with a gain of just 14% after the media-inflated worries over the approval of an opioid amid the ongoing opioid crisis. However, administering it to patients only in a hospital setting should significantly reduce the risk of abuse.

The slower-than-expected launch for the drug is creating new problems. Are hospitals avoiding Dsuvia, or are investors simply overreacting to just five weeks of sales data?

Now what

AcelRx Pharmaceuticals remains confident in its commercialization efforts and expects to end 2019 with 125 hospitals in its network. The business exited March with $90.2 million in cash, cash equivalents, and short-term investments so it's relatively well funded to get Dsuvia up to speed. That said, if drug sales appear weak, then Wall Street will need to significantly reduce expectations for full-year 2019 revenue of $7.9 million and full-year 2020 revenue of $32 million.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

AcelRx Pharmaceuticals, Inc. Stock Quote
AcelRx Pharmaceuticals, Inc.
$0.23 (3.23%) $0.01

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.