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What's in the Cards for AcelRx (ACRX) This Earnings Season?

Zacks Equity Research

AcelRx Pharmaceuticals, Inc. ACRX will focus on the sales uptake its drug- Dsuvia in the second quarter of 2019.

Shares of the company have gained 19.5% year to date compared with the industry’s growth of 7.4%.

 

 

In the last reported quarter, the company had a positive earnings surprise of 26.09%. Moreover, AcelRx has surpassed earnings estimates in two of the trailing four quarters, the average positive surprise being 6.46%.

Let’s see how things are shaping up prior to the announcement of the second-quarter results.

Factors Likely to Impact Q2 Results

AcelRx is a specialty pharmaceutical company, focused on innovative therapies for use in medically supervised settings. The company received its first FDA approval for Dsuvia  (known as Dzuveo in Europe) in November 2018 for use in adults in certified medically supervised healthcare settings for the management of pain acute enough to require an opioid analgesic, and for which alternative treatments are inadequate.

The drug was launched in the second half of February 2019, with Dsuvia available for sale for five weeks in the first quarter of 2019. We expect the company to provide updates on the launch of the drug and the revenues it generated in the second quarter of 2019.

The company successfully completed or scheduled 46 hospital formulary reviews by mid-year, and is on track for 125 approvals by year-end. The formulary approvals are crucial for the drug to be commercially available. We expect the company to provide an update on this during the second-quarter earnings call.

In addition to hospital formularies, AcelRx became an approved vendor for an ambulatory surgical center (ASC) network with more than 300 locations across the United States, making Dsuvia available beyond the hospital setting.  

The company expects to resubmit the Zalviso new drug application (NDA) before the end of 2019. The drug, if approved, would provide the company with another acute care product to market in the United States, thereby leveraging its commercial infrastructure. The company is seeking approval of Zalviso for the management of moderate-to-severe pain in hospitalized adult patients. However, Zalviso is approved in Europe for the same indication

The company incurred increased research & development (R&D) and general & administrative (G&A) expenses due to higher personnel-related expenses in preparation of the commercial launch of Dsuvia. Combined R&D and SG&A expenses for the remaining quarters of 2019 are expected between $15 million and $18 million, which includes approximately $2 million of non-cash, stock-based compensation per quarter.

What Does the Zacks Model Unveil?

Our proven model does not conclusively show an earnings beat for AcelRx in the to-be-reported quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates. But that is not the case here, as you will see below.

Earnings ESP: AcelRX has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at a loss of 23 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently has a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive Earnings ESP to be confident of an earnings beat.

Note that Sell-rated stocks (Zacks Rank #4 or 5) going into an earnings announcement are best avoided.

AcelRx Pharmaceuticals, Inc. Price and Consensus

 

AcelRx Pharmaceuticals, Inc. Price and Consensus

AcelRx Pharmaceuticals, Inc. price-consensus-chart | AcelRx Pharmaceuticals, Inc. Quote

Stocks That Warrant a Look

Here are some drug/biotech stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Gilead Sciences Inc. GILD has an Earnings ESP of +3.20% and a Zacks Rank #2. The company is scheduled to release second-quarter 2019 results on Jul 30. You can see the complete list of today’s Zacks #1 Rank stocks here.

Regeneron Pharmaceuticals, Inc. REGN has an Earnings ESP of +6.25% and a Zacks Rank #3. The company is scheduled to release second-quarter 2019 results on Aug 6.

Allergan plc. AGN has an Earnings ESP of +3.87% and a Zacks Rank #3.

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