Acura Pharma Shares Pop on Pfizer Expanding Commercialization of Oxecta

Andrew Klips  |

Small cap specialty drug maker Acura Pharmaceuticals (ACUR) got a lift in Monday trading after reporting that its partnership with Pfizer Inc. (PFE) may soon begin to line corporate coffers. The company said that Pfizer will be expanding its commercialization efforts of Oxectar (oxycodone HCl) Tablets Cll during the fourth quarter.

Oxecta is an opioid made by Pfizer that utilizes Acura's Aversion™ technology to prevent abuse of the potent painkiller. The aversion technology keeps Oxecta from being crushed for injection or snorting.

The U.S. Food and Drug Administration has been cracking down on abuse of opioids, encouraging manufacturers to employ technologies that deter abuse.

In January 2012, Pfizer made Oxecta tablets Cll commercially available. Pfizer licensed the technology from Acura in the U.S., Canada and Mexico for use in four of its opioid-based pain products. Acura receives tiered royalties ranging from 5 percent to 25 percent on net sales of Oxecta. The royalties are due to Acura within 45 days after the end of each calendar year.

Acura received a $20 million milestone payment from Pfizer in July 2011 when the FDA approved Oxecta tablets CII. In February, Acura started to earn royalties from Oxecta sales, which didn't amount to much yet. Acura had previously said that it expected royalties to be nominal until Pfizer began promotional efforts with doctors.

In the first quarter of 2013, Oxecta sales were only $77,000, equating to about $4,000 in royalties to Acura. Acura reported a net loss of $4.2 million, or 9 cents per share, for the quarter, compared to a net loss of $2.3 million, or 5 cents per share, in the year prior quarter. The quarter ended with Acura having $21.5 million in cash, cash equivalents and marketable securities and no long-term debt.

Shares of ACUR have been known to make big moves in one or two days in the past six months, but struggle to hold the gains in subsequent trading days. In March, shares swelled more than 80 percent when the company announced getting its tamper-resistant pseudoephedrine product into chain drug store Kerr Drug. A month later, shares were back where they started.

A new patent in April delivered similar results with a near double in share value followed by a multi-week slide back to base levels.

On Monday, shares galloped ahead from Friday's $1.88 closing price to hit as high as $2.59 (a move of 37.7%), but gave a portion back as the day moved on, closing at $2.22 for gains of $18.1 percent. The move today leaves shares of ACUR essentially flat so far in 2013. But, like so many other small caps, the potential is there, it's just a matter of when partnerships and the pipeline start to deliver the results investors are waiting for.

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