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AcelRx Pharmaceuticals(ACRX) - 2023 Q3 - Quarterly Report
ACRXAcelRx Pharmaceuticals(ACRX)2023-11-13 16:00
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Financial Performance - Total current assets decreased from 24,566,000asofDecember31,2022to24,566,000 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,comparedto117,000, compared to 0 for the same period in 2022, indicating a significant increase[25] - Research and development expenses increased to 1,178,000forthethreemonthsendedSeptember30,2023,upfrom1,178,000 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 3,724,000inQ32022to3,724,000 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,comparedtoanetlossof1,357,000, 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 61,000forthethreemonthsendedSeptember30,2023,comparedtoalossof61,000 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 21,814,000asofDecember31,2022to21,814,000 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 13,880,000fortheninemonthsendedSeptember30,2023,comparedtoanetincomeof13,880,000 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 1.418million,comparedto1.418 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 1.357million,resultinginabasicnetlosspershareof1.357 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,comparedtoanetincomeof13,880,000, 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)for2023,downfrom(0.45) for 2023, down from 8.03 in 2022[116] Assets and Liabilities - Total liabilities decreased from 25,673,000asofDecember31,2022to25,673,000 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,adecreasefrom13,389,000, a decrease from 20,770,000 as of December 31, 2022[58] - The accrued balance due under the Loan Agreement with Oxford was 0,downfrom0, 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,comparedto8,615,000, 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 1.40pershare[97]−Thefairvalueofthewarrantliabilitywasestimatedat1.40 per share[97] - The fair value of the warrant liability was estimated at 1,380,000, down from 7,098,000asofDecember31,2022[61]CashFlowandFinancing−Thecompanyreportedanetcashusedinoperatingactivitiesof7,098,000 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 3.1millionfortheninemonthsendedSeptember30,2023,primarilyfromthesaleofDSUVIAtoAlora[188]−Cashprovidedbyfinancingactivitieswas3.1 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 8.9millioninnetproceedsfromequityfinancing[189]−Thecompanyraised8.9 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 16.3millionupontheexerciseofcommonwarrants[41]−ThecompanyclosedaprivateplacementofcommonstockonJuly20,2023,raisinggrossproceedsof16.3 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 16.3millionupontheexerciseofcommonwarrants[150]−Thecompanyhasaliquidityconcern,expectingtoneedadditionalcapitaltofundoperationswithinthenexttwelvemonths[41]−Thecompanyexpectstoneedadditionalcapitaltofundoperationsforatleastthenexttwelvemonthsduetoincurredlossesandnegativecashflows[177]−Currentcapitallevelsareinsufficienttofundoperationsforthenexttwelvemonthswithoutraisingadditionalcapital[212]BusinessOperationsandStrategy−Thecompanyisfocusedonadvancingthedevelopmentofitsproductcandidates,includingNiyad™,andaimstosecureregulatoryapprovalforcommercialization[16]−ThecompanyhasongoingdevelopmentforNiyad™,aregionalanticoagulant,whichhasreceivedBreakthroughDeviceDesignationstatusfromtheFDA[39]−Thecompanyplanstocommercializeanephedrinepre−filledsyringeandaphenylephrinepre−filledsyringe,pendingFDAapproval[40]−ThecompanyispreparingNewDrugApplicationsforitsephedrineandphenylephrinepre−filledsyringeproductcandidates,whicharealreadyapprovedintheEuropeanUnion[134][136]−ThecompanyplanstoinitiatearegistrationaltrialforitsproductcandidateNiyadin2023andsubmitaPremarketApprovalapplicationtotheFDAinthesecondhalfof2024[121]−Thecompanyhaspendingpatentapplicationsfornafamostatinvariousindications,includingARDSandDIC,whicharealreadyapprovedinJapanandSouthKorea[137]−ThecompanyhasnoplanstofurtherdevelopanysufentanilsublingualproductcandidatesfollowingthedivestmentofDSUVIA[143]−Thecompanyisfocusedonreducingoperatingcostswhilemaximizingthevalueofitsremainingproductcandidates[143]RisksandCompliance−Thecompanyhasidentifiedrisksincludingtheabilitytomanageoperatingcostsandreducecashburn,whichcouldimpactfutureperformance[16]−Thecompanyfacesrisksrelatedtodelaysinclinicaltrials,whichcouldincreasecostsandjeopardizeregulatoryapprovals[205]−ThecompanyisdependentonthesuccessfulcommercializationofDSUVIAbyAloraPharmaceuticalstoreceiveroyalties,whichposesarisktofinancialperformance[205]−Amaterialweaknessininternalcontroloverfinancialreportingwaspreviouslyidentified,leadingtoarestatementoffinancialstatementsforcertainperiods[198]−Thecompanyhasimplementedremediationmeasurestoaddresstheidentifiedmaterialweakness,resultinginanimprovedinternalcontrolenvironmentasofJune30,2023[200]−ThecompanyreceivedanoticefromNasdaqregardingnon−compliancewiththeMinimumBidPriceRule,whichmayaffectfuturecapitalraisingefforts[177]DiscontinuedOperations−TheDSUVIAbusinesswasclassifiedasdiscontinuedoperationsasofMarch31,2023,affectingthefinancialstatementsforallperiodspresented[58]−ThecompanyclosedatransactionwithAloraPharmaceuticalsonApril3,2023,forthedivestmentofitsDSUVIAproduct,whichincludesa1516.3 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 0in2022[72]−ThenetlossfromdiscontinuedoperationsfortheninemonthsendedSeptember30,2023,was0 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 9,822,000in2022[72]−Thecompanyrecognizedanetincomefromdiscontinuedoperationsof9,822,000 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]