AcelRx’s Zalviso: Approval Does Not Come in the “First-Round”

Update 11.06.2014

Bad things usually follow each other. And wishful thinking usually burst. After CRL, the delay followed and class I resubmission wish bursted. Today, CEO Richard King is leaving the company.

What happened:

As our 4th project, PSIC club predicted FDA approval of AcelRx’s Zalviso for the treatment of moderate-to-severe breakthrough pain to replace current SOC – IV PCA.

However, on 7.25.2014, FDA issued a CRL citing three things:
* reduce optical sensor errors that result in premature cartridge change.
* revise instruction manual
* provide data for shelf life

Lesson learned:

1. Regarding AcelRx and Zalviso:

Wen: “In my eyes, requests about changes to the Instructions for Use for the device, and additional data to support the shelf life are very typical and are usually a good sign, although addition bench test and human factor (very hot topic with FDA) consideration are requested to demonstrate the proper use.”

Ming: “neither efficacy nor safety were challenged by FDA.”

Ming’s comment is very concise. “Efficacy and safety” is the core of NDA. Despite the CRL, I am still positive about AcelRx’s long-term success.

2. Regarding FDA:

Science is not everything. We predicted approval based on the clinical trial facts that Zalviso is much safer while as effective as IV PCA. AcelRx is committed and FDA ought to solve this unmet medical need.

However, Approval Does Not Mean “First-Round” Approval. As a watchdog agency who bears the highest standard in regulation, FDA makes sure everything is perfect and does not need to approve on the first round. Statistics shows, in the first round, only 54% NDAs are approved. After 2nd, 3rd round resubmission, it reaches about 80%. Reference: Clinical development success rates for investigational drugs. Hay et al. 2014 Nature Biotech.

FDA cited three device related issues. These are not science but mostly human related factors. If AcelRx was more experienced or prepared the NDA application with more patience, they could have avoided these citations. On the other notes, due to pressure from the Congress on on-time PDUFA review, FDA is more prone to issue a CRL than to request an 90-day extension when it needs more information from company.

3. Regarding the club:

We made the best prediction with available information. And I still believe the prediction will come true in the next submission.

So far, we always evaluated based on approval, never the likelihood of approval. Perhaps a 60% chance for Zalviso would give me a lower discounted value.

I propose that in future projects, the financial team continues to evaluate assuming approval (or rejection if it’s the case.)

Yet, on the product meeting, the whole club vote for a consensus likelihood, not just Yes or No.

It seems small companies are not good at their first NDAs: Chelsea and AcelRx both failed in the 1st round. Yet Celgene’s abraxane and CBST’s Tedizolid had no problem.

In AcelRx’s case, as their first NDA, first submission and a combination of device and drug, the likelihood may not be high. Well, it’s easy to say in hindsight. At least we learned.


As of 8.17.2014, ACRX hovers around $6.4 level, a 30-40% discount from pre-CRL level. I plan to buy more shares.