Financial Performance - Total revenue for the three months ended September 30, 2024, was $117,000, compared to $370,000 for the same period in 2023, representing a decrease of 68.4%[13] - The net loss for the three months ended September 30, 2024, was $3,353,000, compared to a net loss of $1,357,000 for the same period in 2023, indicating a deterioration of 146.5%[13] - Basic and diluted loss per share for continuing operations was $(0.13) for the three months ended September 30, 2024, compared to $(0.08) for the same period in 2023[13] - As of September 30, 2023, the company reported a net loss of $1,357,000, with total equity amounting to $18,307,000[15] - The company recognized a net loss from discontinued operations of $8,098 thousand for the nine months ended September 30, 2023, with total revenues from discontinued operations at $501 thousand[47] Expenses and Costs - Research and development expenses for the three months ended September 30, 2024, were $2,053,000, an increase of 74.4% from $1,178,000 in the same period of 2023[13] - Total operating costs and expenses for the three months ended September 30, 2024, were $3,749,000, compared to $3,426,000 for the same period in 2023, reflecting an increase of 9.4%[13] - The Company recorded total stock-based compensation expense of $234,000 for the three months ended September 30, 2024, compared to $378,000 for the same period in 2023[79] - The total stock-based compensation expense for the nine months ended September 30, 2024, was $759,000, down from $1,418,000 for the same period in 2023[79] Equity and Liabilities - Total stockholders' equity decreased to $9,641,000 as of September 30, 2024, down from $14,105,000 as of December 31, 2023[10] - The accumulated deficit increased to $(455,360,000) as of September 30, 2024, compared to $(444,226,000) as of December 31, 2023[10] - The company reported total liabilities and stockholders' equity of $21,014,000 as of September 30, 2024, compared to $20,395,000 as of December 31, 2023[10] Cash Flow and Financing - The company experienced a net cash used in operating activities of $10,429,000 for the nine months ended September 30, 2023, compared to $13,543,000 for the same period in the previous year[16] - The company had cash and cash equivalents of $11,117,000 at the end of the reporting period, down from $13,389,000 at the beginning of the period[16] - The company raised $5,884,000 from the issuance of common stock related to the exercise of prefunded warrants during the reporting period[16] - Management plans to seek additional capital through various means, including public or private equity offerings and potential asset monetization[24] Product Development and Strategy - The company is focused on advancing the development of its lead product candidate, Niyad™, and aims to secure regulatory approval and commercialization[6] - The company is focused on developing innovative therapies, including Niyad™ and LTX-608, targeting conditions such as acute respiratory distress syndrome and disseminated intravascular coagulation[18] - The company has a product development pipeline that includes a license agreement for ephedrine and phenylephrine pre-filled syringes, pending FDA approval[22] Risks and Concerns - The company faces significant risks including market volatility, supply chain disruptions, and the ability to obtain necessary financing for operations[6] - The company has incurred recurring operating losses and negative cash flows since inception, raising concerns about its ability to continue as a going concern[23] - The Company may need to reduce its workforce or delay clinical trials if adequate funds are not available[25] Accounting and Financial Reporting - The Company is evaluating the impact of new accounting standards, including ASU 2023-07 and ASU 2023-09, but does not expect them to materially affect financial statements[34][35] - The Company has reclassified certain prior year amounts in its financial statements to conform to current year presentation[29] - The Company believes its most significant accounting estimates relate to revenue recognition and impairment of long-lived assets[28] Stock and Warrants - As of September 30, 2024, the Company had 29,474,257 warrants outstanding, with a weighted average exercise price of $0.96 per share[75] - The Company amended its 2020 Equity Incentive Plan to increase the number of authorized shares by 1,171,395, bringing the total to 3,161,395 shares[72] - The Company amended its 2011 Employee Stock Purchase Plan to increase the number of authorized shares by 100,000, totaling 345,000 shares[74] - The basic net loss per share of common stock is calculated by dividing the net loss by the weighted average number of shares outstanding for the period[83] - A total of 2,096,052 common stock equivalents were excluded from the computation of diluted net loss per share for the three months ended September 30, 2024, due to antidilutive effects[84]

Financial Performance - Net loss from continuing operations for Q3 2024 was $3.4 million, compared to a net loss of $1.4 million in Q3 2023[7]. - Net loss attributable to common shareholders for Q3 2024 was $3.4 million, or $0.13 per share, compared to a net loss of $1.4 million, or $0.08 per share, in Q3 2023[8]. - Talphera's total operating costs and expenses for Q3 2024 were $3.7 million, compared to $3.4 million in Q3 2023[6]. - Total operating expenses for the three months ended September 30, 2024, were $3,749,000, slightly up from $3,426,000 in the same period last year[21]. - The company reported a total of $12,256,000 in operating expenses for the nine months ended September 30, 2024, compared to $12,976,000 for the same period in 2023[21]. Research and Development - Combined R&D and SG&A expenses for Q3 2024 were $3.7 million, up from $3.4 million in Q3 2023, primarily due to NEPHRO study costs[6]. - Research and development expenses for the three months ended September 30, 2024, were $2,053,000, up from $1,178,000 for the same period in 2023, representing a 74% increase[21]. - The NEPHRO CRRT study aims to enroll 166 patients across up to 14 clinical sites in the U.S.[4]. - The first patient was enrolled in the NEPHRO CRRT study in August 2024[3]. - The study's primary endpoint is the mean post-filter activated clotting time for circuits infused with nafamostat compared to placebo over the first 24 hours[4]. - Talphera anticipates completing the NEPHRO study by the end of 2025 with improved enrollment rates[2]. Financial Position - Cash and investments totaled $11.1 million as of September 30, 2024[5]. - Cash, cash equivalents, and investments increased to $11,117,000 as of September 30, 2024, up from $9,381,000 at December 31, 2023[20]. - Total assets rose to $21,014,000, compared to $20,395,000 at the end of 2023[20]. - Total liabilities increased significantly to $11,373,000 from $6,290,000[20]. - Total stockholders' equity decreased to $9,641,000, down from $14,105,000[20]. Operating Expenses - Selling, general, and administrative expenses decreased to $1,696,000 for the three months ended September 30, 2024, from $2,248,000 in the prior year[21]. - Non-GAAP operating expenses for the three months ended September 30, 2024, were $3,515,000, compared to $3,048,000 in the prior year[21]. - Stock-based compensation expense for the three months ended September 30, 2024, was $234,000, down from $378,000 in the same period last year[21]. Regulatory Status - The company has received Breakthrough Device Designation status from the FDA for its lead product candidate, Niyad™[11].

Financial Performance - The cash, cash equivalents, and investments balance was $14.0 million as of June 30, 2024, an increase from $9.4 million at the end of 2023[22]. - Combined R&D and SG&A expenses for Q2 2024 totaled $4.3 million, slightly up from $4.2 million in Q2 2023, primarily due to increased costs associated with Niyad development[7]. - The net loss from continuing operations for Q2 2024 was $3.8 million, an improvement from a net loss of $4.4 million in Q2 2023[8]. - Net loss attributable to common shareholders for Q2 2024 was $3.8 million, or $0.15 per share, compared to a net loss of $4.4 million, or $0.40 per share, in Q2 2023[9]. - The company recognized a change in fair value of the warrant liability, contributing to the net loss reduction in Q2 2024[8]. - Talphera's total assets increased to $24.9 million as of June 30, 2024, compared to $20.4 million at the end of 2023[22]. Clinical Development - Talphera initiated patient screening at multiple clinical sites for the NEPHRO CRRT registrational study, which will enroll 166 patients across up to 14 sites[5]. - Talphera received FDA approval to increase the maximum number of study sites for the NEPHRO study from 10 to 14, which is expected to expedite the study's completion[2]. - The primary endpoint of the NEPHRO study is the mean post-filter activated clotting time for circuits infused with nafamostat compared to placebo over the first 24 hours[5]. - Talphera's lead product candidate, Niyad™, is being studied as an anticoagulant for the extracorporeal circuit and has received Breakthrough Device Designation from the FDA[11].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended June 30, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from to Commission File Number: 001-35068 TALPHERA, INC. (Exact name of registrant as specified in its charter) Delaware 41-2193603 (State or other jurisdiction of incorporati ...

Financial Performance - Total current assets increased to $19,953,000 as of March 31, 2024, compared to $11,576,000 as of December 31, 2023, representing a 72% increase[21]. - The net loss for Q1 2024 was $3,954,000, a decrease from a net loss of $8,152,000 in Q1 2023, reflecting a 51% improvement[24]. - Cash and cash equivalents rose to $12,122,000 at the end of Q1 2024, compared to $5,721,000 at the beginning of the period, marking a 112% increase[31]. - Total liabilities increased to $12,438,000 as of March 31, 2024, from $6,290,000 as of December 31, 2023, representing a 98% increase[21]. - The company’s accumulated deficit reached $448,180,000 as of March 31, 2024, compared to $444,226,000 at the end of 2023[21]. - The Company recorded approximately $6.1 million as a liability from the sale of future payments related to DSUVIA, with $1.2 million recognized as other income[52]. - Total other income (expense), net for Q1 2024 was $283,000, a decrease of 95% compared to $5.4 million in Q1 2023[132]. - Interest income and other income, net for Q1 2024 was $220,000, up 10% from $200,000 in Q1 2023[133]. - Cash used in operating activities for Q1 2024 was $2.9 million, reflecting a net loss of $4.0 million[146]. - Cash provided by financing activities for Q1 2024 was $12.0 million, primarily due to net proceeds from the XOMA Purchase Agreement and the January 2024 private placement[150]. Research and Development - Research and development expenses for Q1 2024 were $1,433,000, up from $1,047,000 in Q1 2023, indicating a 37% increase year-over-year[23]. - The company is focused on developing Niyad™, a regional anticoagulant for the dialysis circuit, and other product candidates for various medical indications[37]. - The company plans to begin enrollment in a registrational trial for Niyad in the second quarter of 2024, which has received FDA Breakthrough Device Designation[99][106]. - The NEPHRO CRRT study will evaluate 166 adult patients and aims to submit a Premarket Approval application to the FDA upon completion of the trial[106]. - The company is developing LTX-608 for various medical conditions and plans to submit an IND following toxicology evaluation[100][101]. - The company expects to submit Investigational New Drug applications for LTX-608, but unexpected findings in nonclinical studies could delay this process[207]. - The company has entered into a PFS Agreement with Aguettant for the development of ephedrine and phenylephrine pre-filled syringes, with expectations for FDA approval without additional changes[208]. Capital and Funding - Management expects to need additional capital to fund operations within the next twelve months due to ongoing losses and cash flow issues[43]. - The company plans to raise additional capital through various means, including public or private equity offerings and potential collaborations[44]. - The company raised approximately $6.0 million in gross proceeds from a private placement on January 22, 2024, with additional potential proceeds of $10.0 million and $2.0 million contingent on clinical trial results and stock price performance, respectively[79][80][81]. - The first tranche of the January 2024 private placement resulted in gross proceeds of approximately $6.0 million, with pre-funded warrants issued for up to 7,792,208 shares[139]. - The second tranche of the January 2024 private placement could provide additional gross proceeds of approximately $10.0 million, contingent on achieving specific clinical trial endpoints[140]. - The company expects to incur significant losses in 2024 and may require additional capital to fund operations within the next twelve months[136]. - The company has financed its operations primarily through equity securities issuance, borrowings, and payments from partners, including a recent agreement to monetize future payments related to DSUVIA sales[167]. Acquisitions and Agreements - On April 3, 2023, the Company completed the DSUVIA Agreement with Alora Pharmaceuticals, acquiring certain assets related to the sufentanil sublingual tablet product[39]. - The Company acquired Lowell Therapeutics, Inc. on January 7, 2022, gaining the Niyad™ product, which has received Breakthrough Device Designation from the FDA[40]. - Talphera entered into a Payment Interest Purchase Agreement with XOMA for $8 million related to certain receivables from the DSUVIA Agreement[38]. - The Company entered into an Asset Purchase Agreement with Alora for the acquisition of assets related to DSUVIA, with a total consideration of $1.1 million and potential sales-based milestones of up to $116.5 million[65]. - In January 2024, the Company sold certain receivables to XOMA for $8.0 million, with proceeds from the sale of future payments amounting to $6.133 million as of March 31, 2024[67]. Operational Challenges - The company has incurred recurring operating losses and negative cash flows since inception, raising substantial doubt about its ability to continue as a going concern[42]. - The company has ongoing litigation risks that may materially adversely affect its financial condition and results of operations[78]. - The company has identified risks related to potential delays in clinical trials and regulatory approvals, which could increase costs and jeopardize product development[163]. - The company may experience significant disruptions in financial markets, impacting its ability to obtain additional capital on favorable terms[174]. - The company may face difficulties in raising additional capital, which could force it to scale back or discontinue product development and commercialization efforts[173]. - The company has a material weakness in its internal control over financial reporting, which may result in errors in financial statements[164]. - Global supply chain disruptions may adversely impact the company's ability to develop and supply its product candidates[115]. Future Outlook - The company expects significant additional capital will be needed in the future to continue planned operations and capital requirements[176]. - The company may need to relinquish or license its rights to technologies or products under unfavorable terms if it cannot secure sufficient funding[173]. - The ability to generate future revenues from product sales depends heavily on successful clinical trials and regulatory approvals[188]. - The approval process for PMA or NDA is lengthy and may incur unexpected delays and costs, impacting the company's financial condition[203]. - The FDA's rejection of clinical data could adversely affect the company's ability to obtain marketing authorization for its product candidates[204]. - The company may need to conduct additional clinical development work to obtain FDA approval, which would increase expenses and delay revenue[205]. - The company may face unexpected liabilities from the acquisition of Lowell, which could adversely affect its financial condition[184].

Financial Position - Cash and investments totaled $18.6 million as of March 31, 2024[1] - Total assets as of March 31, 2024, were $28.8 million, with total liabilities of $12.4 million[19] - The company announced a total of $26 million in committed capital, including $8 million from DSUVIA royalties and $18 million in equity from existing investors[4] Expenses and Losses - Combined R&D and SG&A expenses for Q1 2024 were $4.2 million, down from $5.3 million in Q1 2023, primarily due to reduced headcount[6] - Net loss from continuing operations for Q1 2024 was $4.0 million, or $0.16 per share, compared to a net income of $0.1 million in Q1 2023[7] Product Development - Talphera's lead product candidate, Niyad, is currently under investigation as an anticoagulant and has received Breakthrough Device Designation from the FDA[9] - Talphera expects to enroll the first patients in the NEPHRO CRRT registrational study in Q2 2024, with the trial's primary endpoint measured at 24 hours[2] - The NEPHRO study will enroll 166 adult patients and evaluate the efficacy of Niyad compared to placebo[11] Leadership Changes - Dr. Shakil Aslam will join Talphera as Chief Development Officer on May 20, 2024, bringing over 20 years of nephrology expertise[5] Company Rebranding - The company underwent a rebranding from AcelRx Pharmaceuticals, Inc. to Talphera, Inc. in January 2024[3]

Acquisition and Product Development - The company acquired Lowell Therapeutics, Inc. for approximately $32.5 million, with up to $26.0 million in contingent consideration based on regulatory and sales milestones[17]. - Niyad™, a product candidate, has received FDA's Breakthrough Device Designation and is expected to begin patient enrollment in a registrational trial in Q1 2024, with a PMA application planned by the end of 2024[20][23]. - The NEPHRO CRRT Study will enroll 166 adult patients and aims to evaluate the efficacy of Niyad compared to placebo, with top-line data expected by Q3 2024[23]. - LTX-608, another product candidate, is being explored for indications such as antiviral treatment and acute respiratory distress syndrome, with initial studies showing potential benefits in COVID patients[30]. - The company plans to submit a PMA application for Niyad by the end of 2024 and expects to enroll the first patient in its registrational study in Q1 2024[38]. - The company is evaluating the second targeted indication for its nafamostat product development candidate, LTX-608, focusing on DIC and acute pancreatitis for initial development[50]. Financial Performance and Capital Needs - The company has not yet generated significant product revenue and anticipates continued losses in the future[9]. - The company has incurred significant losses since inception and may need to raise additional capital, which could dilute existing shareholders[9]. - The company will need to raise additional funds through equity sales, asset monetization, or debt issuance to sustain operations and development programs[338]. Regulatory and Approval Processes - The FDA approval process for product candidates is time-consuming and may involve unexpected delays and costs[9]. - Niyad is classified as a Class III medical device and is subject to the PMA application process, which is generally more costly and time-consuming than the 510(k) process[69]. - The FDA has 180 days to review a filed PMA application, although the review often takes significantly longer, and may request additional information during this period[72]. - The approval process for drug products requires substantial time and financial resources, and the company cannot be certain that approval will be granted on a timely basis[57]. - The Breakthrough Devices Program allows for expedited review of medical devices that address life-threatening conditions, with priority review for designated devices[76]. Market Potential and Sales Projections - The peak sales potential for Niyad, if approved for use in CRRT and IHD, may exceed $200 million annually in the United States, based on an estimated addressable population of 500,000 patients undergoing CRRT and 350,000 patients undergoing IHD[35]. - The company believes its two pre-filled syringe product candidates could have a peak sales potential of over $100 million, with a focus on eliminating the need for on-the-spot calculations and additional dilution steps[37]. - Nafamostat, if approved for regional anticoagulation in CRRT, may address safety concerns associated with current anticoagulants, as 29% of cases do not use any anticoagulant due to safety concerns[33]. - The incidence of bleeding during continuous hemofiltration with heparin was 66.7%, compared to only 4.3% with nafamostat, indicating a significant safety advantage[34]. Manufacturing and Supply Chain Risks - The company relies on third-party manufacturers and suppliers for its product candidates, which poses risks to the supply chain[10]. - The company relies on contract manufacturers for the production of its Niyad product, with a single contract manufacturer currently producing the nafamostat API and a separate one for the finished product[52]. - The company is in discussions with a back-up manufacturer for Niyad to ensure there is not a single source of supply[52]. - Unforeseen delays in drug manufacturing and supply chains may arise from regulatory compliance issues, potentially impacting product availability[81]. Compliance and Regulatory Challenges - The company must comply with extensive cGMP requirements throughout the manufacturing process, which require considerable ongoing investment[66]. - Manufacturers must comply with stringent FDA regulations, including quality assurance procedures and medical device reporting regulations[77]. - The Drug Supply Chain Security Act mandates tracking and tracing obligations for pharmaceutical manufacturers, including reporting counterfeit products[80]. - The company faces significant penalties for violations of health regulatory laws, which could adversely affect operations and financial results[91]. Market and Legislative Environment - Sales of approved products depend on third-party payer coverage and reimbursement, which are increasingly scrutinized for cost-effectiveness[92]. - The company may need to conduct pharmacoeconomic studies to demonstrate the cost-effectiveness of products for reimbursement approval[92]. - The company anticipates ongoing legislative and regulatory changes in the healthcare system that may impact product commercialization and profitability[93]. - In the U.S., the Affordable Care Act and subsequent reforms aim to broaden insurance access and reduce healthcare spending, with potential implications for drug pricing and reimbursement rates[98]. - The Inflation Reduction Act of 2022 extends enhanced subsidies for health insurance coverage through 2025 and introduces measures to lower out-of-pocket costs for Medicare beneficiaries[98]. - The company faces competition from lower-priced products in foreign markets due to varying drug pricing regulations, particularly in the European Union[95]. - Legislative proposals are being made to increase transparency in drug pricing and reform reimbursement methodologies, which could affect the company's pricing strategies[102]. Workforce and Employment - As of December 31, 2023, the company employed 15 full-time employees, with a commitment to pay equity and competitive benefits[104]. - The company is not currently required to provide certain financial disclosures as a smaller reporting company under the Securities Exchange Act[339].

Core Viewpoint - AcelRx Pharmaceuticals, Inc. has rebranded to Talphera, Inc. to reflect its new mission of developing innovative therapies for medically supervised settings, moving beyond its original focus on acute pain [1][2]. Company Overview - Talphera, Inc. is a specialty pharmaceutical company focused on innovative therapies for medically supervised settings, with its lead product candidate being Niyad, a formulation of nafamostat [6][7]. - The name "Talphera" is derived from "Talisman," symbolizing a strong leader and a new pharmaceutical era for the company [2]. Product Development - Talphera's lead product candidate, Niyad, has received FDA Breakthrough Designation and is being studied as an anticoagulant for the extracorporeal circuit [3][6]. - The company plans to initiate the NEPHRO CRRT (Nafamostat Efficacy in Phase 3 Registrational Continuous Renal Replacement Therapy) Study, which has received IRB approval and will evaluate 166 adult patients [4][5]. Regulatory and Market Strategy - A PMA submission for Niyad is expected to be filed with the FDA in the second half of 2024 [5]. - The first patient for the NEPHRO study is anticipated to be enrolled in the first quarter of 2024 [5].

Financial Performance - Total current assets decreased from $24,566,000 as of December 31, 2022 to $14,420,000 as of September 30, 2023, representing a decline of approximately 41.3%[22] - Royalty revenue for the three months ended September 30, 2023 was $117,000, compared to $0 for the same period in 2022, indicating a significant increase[25] - Research and development expenses increased to $1,178,000 for the three months ended September 30, 2023, up from $799,000 in the same period of 2022, reflecting a rise of approximately 47.5%[25] - Selling, general and administrative expenses decreased from $3,724,000 in Q3 2022 to $2,248,000 in Q3 2023, a reduction of about 39.6%[25] - The net loss attributable to common shareholders for the three months ended September 30, 2023 was $1,357,000, compared to a net loss of $6,936,000 for the same period in 2022, showing an improvement of approximately 80.5%[25] - The company reported a net income from discontinued operations of $61,000 for the three months ended September 30, 2023, compared to a loss of $2,111,000 in the same period in 2022[25] - The total stockholders' equity decreased from $21,814,000 as of December 31, 2022 to $18,307,000 as of September 30, 2023, a decline of approximately 16.5%[22] - The company incurred a net loss of $13,880,000 for the nine months ended September 30, 2023, compared to a net income of $55,239,000 in the same period of the previous year[33] - The company reported a balance of 10,994,102 shares as of June 30, 2023, increasing to 16,952,269 shares by September 30, 2023[30] - The total stock-based compensation expense for the nine months ended September 30, 2023, was $1.418 million, compared to $2.237 million for the same period in 2022[106] - The net loss attributable to common shareholders for the three months ended September 30, 2023, was $1.357 million, resulting in a basic net loss per share of $0.08[115] - For the nine months ended September 30, 2023, the net loss attributable to common shareholders was $13,880,000, compared to a net income of $49,073,000 for the same period in 2022[116] - The basic net income (loss) per share from continuing operations was $(0.45) for 2023, down from $8.03 in 2022[116] Assets and Liabilities - Total liabilities decreased from $25,673,000 as of December 31, 2022 to $4,954,000 as of September 30, 2023, a reduction of approximately 80.7%[22] - As of September 30, 2023, total cash and cash equivalents amounted to $13,389,000, a decrease from $20,770,000 as of December 31, 2022[58] - The accrued balance due under the Loan Agreement with Oxford was $0, down from $5.4 million at the end of 2022[85] - The total liabilities of discontinued operations as of September 30, 2023, were $8,615,000, compared to $7,252,000 in net assets[78] - As of September 30, 2023, AcelRx had 21,682,049 outstanding warrants with a weighted average exercise price of $1.40 per share[97] - The fair value of the warrant liability was estimated at $1,380,000, down from $7,098,000 as of December 31, 2022[61] Cash Flow and Financing - The company reported a net cash used in operating activities of $13,543,000 for the three months ended September 30, 2023[33] - Cash provided by investing activities was $3.1 million for the nine months ended September 30, 2023, primarily from the sale of DSUVIA to Alora[188] - Cash provided by financing activities was $3.5 million for the nine months ended September 30, 2023, mainly due to $8.9 million in net proceeds from equity financing[189] - The company raised $10.0 million in July 2023 through a private placement of common stock and warrants, with an additional potential $16.3 million upon the exercise of common warrants[41] - The company closed a private placement of common stock on July 20, 2023, raising gross proceeds of $10.0 million, with an additional potential $16.3 million upon the exercise of common warrants[150] - The company has a liquidity concern, expecting to need additional capital to fund operations within the next twelve months[41] - The company expects to need additional capital to fund operations for at least the next twelve months due to incurred losses and negative cash flows[177] - Current capital levels are insufficient to fund operations for the next twelve months without raising additional capital[212] Business Operations and Strategy - The company is focused on advancing the development of its product candidates, including Niyad™, and aims to secure regulatory approval for commercialization[16] - The company has ongoing development for Niyad™, a regional anticoagulant, which has received Breakthrough Device Designation status from the FDA[39] - The company plans to commercialize an ephedrine pre-filled syringe and a phenylephrine pre-filled syringe, pending FDA approval[40] - The company is preparing New Drug Applications for its ephedrine and phenylephrine pre-filled syringe product candidates, which are already approved in the European Union[134][136] - The company plans to initiate a registrational trial for its product candidate Niyad in 2023 and submit a Premarket Approval application to the FDA in the second half of 2024[121] - The company has pending patent applications for nafamostat in various indications, including ARDS and DIC, which are already approved in Japan and South Korea[137] - The company has no plans to further develop any sufentanil sublingual product candidates following the divestment of DSUVIA[143] - The company is focused on reducing operating costs while maximizing the value of its remaining product candidates[143] Risks and Compliance - The company has identified risks including the ability to manage operating costs and reduce cash burn, which could impact future performance[16] - The company faces risks related to delays in clinical trials, which could increase costs and jeopardize regulatory approvals[205] - The company is dependent on the successful commercialization of DSUVIA by Alora Pharmaceuticals to receive royalties, which poses a risk to financial performance[205] - A material weakness in internal control over financial reporting was previously identified, leading to a restatement of financial statements for certain periods[198] - The company has implemented remediation measures to address the identified material weakness, resulting in an improved internal control environment as of June 30, 2023[200] - The company received a notice from Nasdaq regarding non-compliance with the Minimum Bid Price Rule, which may affect future capital raising efforts[177] Discontinued Operations - The DSUVIA business was classified as discontinued operations as of March 31, 2023, affecting the financial statements for all periods presented[58] - The company closed a transaction with Alora Pharmaceuticals on April 3, 2023, for the divestment of its DSUVIA product, which includes a 15% royalty on net product sales[139] - The impairment of net assets held for sale was $6,853,000 for the nine months ended September 30, 2023, compared to $0 in 2022[72] - The net loss from discontinued operations for the nine months ended September 30, 2023, was $8,098,000, an improvement from a loss of $9,822,000 in 2022[72] - The company recognized a net income from discontinued operations of $0.1 million for Q3 2023, compared to a net loss of $2.1 million in Q3 2022[176] - The company continues to act as an agent in relation to DSUVIA sales to the DoD, recognizing revenue when the DoD obtains control of the product[55] Market and Future Outlook - The company has not yet generated significant product revenue and may never achieve profitability, raising concerns about its ability to continue as a going concern[208] - The company expects to continue incurring substantial losses in 2023 and may face negative cash flows from operations in the future[208] - Future capital requirements may vary significantly due to factors such as regulatory submissions, commercialization expenditures, and business development costs[191] - The company may require additional capital to sustain operations, which could delay or eliminate commercialization efforts and product development programs[210] - There is substantial doubt about the company's ability to continue as a going concern based on current operating expenses[212] - The unaudited financial statements for the quarter ended September 30, 2023, were prepared on the basis of a going concern[212] - Financial statements do not include adjustments that may be necessary if the company cannot continue as a going concern[212]

Financial Data and Key Metrics Changes - The company ended Q3 2023 with $13.4 million in cash and short-term investments, including $26 million from a financing round [16] - Revenues for Q3 were $0.1 million, primarily from royalties on DSUVIA sales, with a 75% royalty from the Department of Defense [16] - Combined R&D and SG&A expenses totaled $3.4 million in Q3, down from $4.5 million the previous year, with expectations for an increase in Q4 due to the upcoming clinical study [17] Business Line Data and Key Metrics Changes - The lead product candidate, Niyad, is a novel anticoagulant for dialysis, with a peak annual sales potential of over $200 million in the US, based on modest market penetration estimates [6][11] - The transition of DSUVIA to Alora Pharmaceuticals is ongoing, with AcelRx supporting Alora during this process [13] - DSUVIA demand from the Department of Defense remained stable, although revenue recognition was affected by shipment timing [14] Market Data and Key Metrics Changes - The market opportunity for Niyad is significant, with estimates suggesting a 20% share of the in-hospital CRRT market and 6% of the outpatient dialysis market [6] - The company is engaging with key opinion leaders in nephrology to discuss the NEPHRO study protocol, reinforcing the urgent medical need for alternatives in anticoagulation during dialysis [7][8] Company Strategy and Development Direction - AcelRx is focusing on unmet medical needs in dialysis, transitioning from acute pain management to developing Niyad for use in continuous renal replacement therapy [4] - The company is preparing for a PMA submission for Niyad in the second half of 2024, with potential launch in the first half of 2025 [11] - AcelRx is also evaluating the timing for NDA submission for its pre-filled syringe candidate, Fedsyra [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the success of the Niyad study, citing the favorable safety profile of nafamostat, which has been used in other markets [11] - The company anticipates robust enrollment for the NEPHRO CRRT study, with top-line data expected by mid-2024 [10][21] - Management highlighted the importance of the upcoming KOL panel discussion to further engage with the nephrology community [8] Other Important Information - The company received an ICD-10 CMS procedural code to facilitate reimbursement for Niyad [11] - AcelRx continues to lead its relationship with the Department of Defense, which is a significant customer for DSUVIA [14] Q&A Session Summary Question: Timeline for NEPHRO CRRT study enrollment and potential holiday impact - Management indicated that holiday periods do not significantly affect enrollment due to the nature of ICU patients [21] Question: Attributes for site selection in the NEPHRO CRRT study - Sites selected are major academic centers with expertise in nephrology and critical care, many of whom are advisors for the study [23] Question: Components of the PMA for Niyad beyond the registrational study data - Additional components include preclinical toxicology studies and stability data, which are being generated concurrently with the clinical trials [26] Question: Market opportunity against heparin and citrate - Management noted that while heparin is standard care, there is potential to capture market share from both citrate and patients receiving no anticoagulation [30][34] Question: Opportunities in intermittent hemodialysis - Management acknowledged that intermittent hemodialysis presents a larger market opportunity, although patients are generally less sick and may tolerate heparin better [36] Question: Future development opportunities beyond pre-filled syringes - The company is exploring development opportunities with LTX-608 for indications such as acute pancreatitis and disseminated intravascular coagulation [40]