AcelRx Pharmaceuticals Reports Fourth Quarter and Full-Year 2010 Financial Results

AcelRx Pharmaceuticals, Inc. (Nasdaq: ACRX), ("AcelRx"), a specialty pharmaceutical company focused on the development and commercialization of innovative therapies for the treatment of acute or breakthrough pain, today reported financial results for the fourth quarter and year ended December 31, 2010. Net loss for the fourth quarter of 2010 was $3.5 million, or $5.23 per common share, compared with a net loss of $3.7 million, or $6.05 per common share, for the fourth quarter of 2009. Net loss for the year ended December 31, 2010 was $14.3 million, or $21.84 per common share, compared to a net loss of $20.1 million, or $34.93 per common share, for the year ended December 31, 2009. Research and development expenses for the twelve and three months ended December 31, 2010 totaled $8.2 million and $1.9 million, compared to $15.5 million and $2.3 million for the twelve and three months ended December 31, 2009. General and administrative expenses were $4.0 million and $1.0 million for the year and quarter ended December 31, 2010, compared to $3.5 million and $1.0 million for the year and quarter ended December 31, 2009. As of December 31, 2010, AcelRx had cash, cash equivalents and short-term investments of $3.7 million, compared to $12.5 million as of December 31, 2009. On February 16, 2011, AcelRx closed its initial public offering of 8.0 million shares of common stock resulting in net proceeds to AcelRx of $35.6 million. We intend to utilize these funds primarily for advancement of our lead program, our hospital-based, patient-controlled analgesia (PCA) product, the Sufentanil NanoTab PCA System (ARX-01). "We are pleased with our progress towards initiating the Phase 3 program for ARX-01 in acute post-operative pain," said Richard King, President and Chief Executive Officer of AcelRx. "We anticipate initiating enrollment in the first Phase 3 study of ARX-01, an abdominal surgery efficacy study, in the second half of 2011. Further, we anticipate starting our second Phase 3 study, a head-to-head trial comparing ARX-01 to the current standard of care, intravenous (IV) PCA morphine, in early 2012. Top-line data from both trials is expected in the first half of 2012." "ARX-01 is a preprogrammed, handheld, sublingual PCA system delivering the high therapeutic index opioid, sufentanil, that has been designed to address the need for effective and well tolerated post-operative pain control in the hospital setting, and to overcome the deficiencies of the current standard of care, IV PCA. The 2010 Decision Resources Acute Pain Report projects that the post-operative pain market for the United States, Europe and Japan will reach $6.5 billion in 2018. We believe that ARX-01 has the opportunity to become the new standard of care for patient-controlled management of moderate-to-severe post-operative pain," said Mr. King.

AcelRx Pharmaceuticals Files Registration Statement for Proposed Initial Public Offering

AcelRx Pharmaceuticals, Inc. announced today that it has filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission (SEC) relating to a proposed initial public offering of shares of its common stock. All shares of the common stock to be sold in the offering will be offered by the Company.

Piper Jaffray & Co. is acting as sole book-running manager. Canaccord Genuity Inc., Cowen and Company, LLC and JMP Securities are acting as co-managers for the offering. The offering will be made only by means of a prospectus. When available, copies of the preliminary prospectus relating to the offering may be obtained from Piper Jaffray & Co., 800 Nicollet Mall, Suite 800, Minneapolis, MN 55402, Telephone 1-800-747-3924.

A registration statement relating to these securities has been filed with the SEC, but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.