NEW YORK (AP) -- Shares of AcelRx Pharmaceuticals Inc. edged higher Monday after a Jefferies & Co. analyst said he thinks the company's pain treatment system will be approved, and U.S. sales will reach $400 million a year.
THE SPARK: Analyst Corey Davis began covering the stock with a "Buy" rating and a price target of $8 per share. Davis said he thinks the company's product ARX-01 — also called the sufentanil NanoTab PCA System — should be approved next year, based on the clinical trial data AcelRx has reported so far. He said the pain management device could be used by 1.2 million people a year, which would bring the company $400 million in revenue from the U.S. alone.
"We see a clear market opportunity for ARX-01 given the current standard of care for post-op pain control is fraught with drawbacks," he wrote.
He added that he expects the launch of the device to be slower than other analyst do.
THE BIG PICTURE: The NanoTab device is designed to treat severe pain following surgery by delivering a pre-set dose of a pain drug beneath the patient's tongue. The patient operates the device by pressing a button. AcelRx says the system is less invasive than intravenous dosing and less prone to dosing errors, creates less risk of infection for patients, and allows for greater mobility and fewer gaps where patients will experience severe pain between doses.
The system delivers doses of a pain drug called sufentanil. AcelRx says sufentanil's side effects are less severe than those of pain drugs like morphine.
In late 2012 and early 2013, the Redwood City, Calif., company said the NanoTab system met its main goals in two late-stage clinical trials involving patients who'd had major open abdominal surgery. During the second quarter AcelRx plans to report results from a trial involving patients who have had hip or knee replacement surgery. The company plans to file for marketing approval during the third quarter.
SHARE ACTION: AcelRx shares rose 22 cents, or 4.4 percent, to $5.25 in midday trading while major indexes like the Standard & Poor's 500, Nasdaq composite index, and Dow Jones Industrial Average all moved lower.
Shares of AcelRx have traded between $2.27 and $5.97 in the last 52 weeks.