Avoid This Biotech Stock

Editor's note: This article is a stock pitch made by a member on CAPS, The Motley Fool's free investing community. The pitch is published UNEDITED and is the opinion of the CAPS member whose pitch it is, in this case: zzlangerhans.

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Company	Acura Pharmaceuticals (Nasdaq: ACUR  )
Submitted By	zzlangerhans
Member Rating	99.56
Submitted On	Feb. 13, 2012
Stock Price at Underperform Recommendation	$3.50

Acura Pharmaceuticals Profile

CAPS Rating (out of 5)	*
Headquarters	Palatine, Ill.
Industry	Drug delivery
Market Cap	$156 million

Sources: S&P Capital IQ, Yahoo! Finance, and Motley Fool CAPS.

This week's pitch:
It's getting close to do-or-die time for Acura, a surprisingly resilient small pharma that has shrugged off more than one obituary in its lifespan. Having written more than one of those obituaries, I feel uniquely qualified to pen another.

Oxecta appears to me to have no advantage over generic oral opiates available at a fraction of the cost. Despite widespread description of Oxecta as an abuse-resistant formulation of oxycodone, The Oxecta label carries an explicit statement that in fact it there is no evidence that it reduces the danger of abuse. Pfizer [ (NYSE: PFE  ) ] and Acura may be relying on this popular misconception to sell the drug, which is only formulated to impede crushing for purposed of snorting or injection. However, the vast majority of abuse of opiates is via oral co nsumption. Acura failed in an attempt to avert this form of abuse by adding niacin, when their niacin-containing oxycodone Acurox was rejected by an FDA panel 19-1 in 2010. Governmental and private health insurance decision-makers will likely not be misled.

Meanwhile, the company's abuse-deterrent form of the OTC cold medication pseudoephedrine is back in clinical testing after a finding that it was still susceptible to conversion to methamphetamine. The commercial prospects of this reformulation of an expendable OTC medication are dubious.

The cash position of 38M will likely decline below 35M at the next earning report February 27, which isn't strong support for a market cap of 160M. Oxecta just became available in January, which means that Acura doesn't have to cop to poor revenues until May. Until then you might want to keep an eye on this stock for a potential short if unpredictable gusts carry the share price back above 5.

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