Recently, AcelRx Pharmaceuticals Inc (NASDAQ: ACRX) has been seeing gains in the market, and for good reason. The company recently announced that its painkiller, Dsuvia has been approved by the FDA. However, the stock is tanking today with no news released by the company? What’s the deal? Well, it has to do with the opiod crisis. Today, we’ll talk about:
- Why ACRX is tumbling;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
Here’s Why ACRX Is Tumbling
As mentioned above, AcelRx Pharmaceuticals is having a horrible day in the market today. This is shocking to many as just a couple of days ago, the United States Food and Drug Administration (FDA) approved Dsuvia.
Dsuvia is a pain medication that is only allowed to be given under special circumstances in the hospital or ambulatory vehicles. Why? Because it is overwhelmingly potent. The truth is that Dsuvia is 1,000 times stronger than Morphine and 10 times stronger than fentanyl, two of the strongest opiods on the market today.
Following the announcement by ACRX that the treatment had been approved, investors were excited. However, since then, the treatment has gotten a ton of bad press. Many argue that the potential for this drug to kill consumers is massive, and while some say it will be highly regulated and only available through medical professionals, many argue that there is a large risk of this drug hitting the street. Even Democratic Senator Ed Markey of Massachusetts asked the FDA not to approve the treatment, stating that:
an opioid that is a thousand times more powerful than morphine is a thousand times more likely to be abused, and a thousand times more likely to kill.
Nonetheless, the FDA looked past these concerns and decided to move forward with approval. Now, there’s one big question for ACRX investors. What are sales going to look like?
At the moment, we are seeing more legal movement in the medical space than ever before as the United States and other regions work to combat opiod abuse. It’s arguable that now isn’t the best time to launch any opiod, let alone one that is as strong as Dsuvia. Now, the FDA did approve the drug, showing that there is a medical need. The question is, what doctor is going to be willing to take the risk to prescribe the treatment, or even have it in their offices? How often is a drug that is 1,000 times stronger than morphine actually needed?
While the answers to these questions are largely unknown, the ACRX investment has largely become a binary one. On one hand, there’s a chance that sales will be horrible. In this case, the stock is likely to tumble. On the other hand, the company may have something up its sleeve, doctors may be willing to try the treatment, and everything might just go well. If this were the case, the upside potential here is incredible.
What We’re Seeing From The Stock
Regardless of potential down the line, fear seems to be the primary emotion among AcelRx investors today as the stock tumbles. Of course, our partners at Trade Ideas were the first to alert us to the declines. Currently (11:22), ACRX is trading at $3.61 per share after a loss of $0.29 per share or 7.40% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on ACRX. In particular, we’re interested in following the story surrounding the company’s plans to commercialize Dsuvia. Nonetheless, we’ll continue to keep a close eye on the news and bring it to you as it breaks!