An underappreciated growth story

George Budwell (AcelRx Pharmaceuticals): If you're looking for a promising under-the-radar growth stock to buy and hold for the long term, AcelRx Pharmaceuticals is a company definitely worth checking out right now. The underlying reason is the recent approval of the company's sublingual opioid, Dsuvia, that's to be used exclusively in medically supervised settings in patients that cannot take medications either orally or intravenously.

While Dsuvia has attracted its fair share of critics because of its sky-high potency, it's important to understand that this powerful new opioid comes in a prepackaged, easy-to-use applicator, which should dramatically lower the potential for accidental overdoses. The fact that Dsuvia can only be administered in structured acute-care settings should also go a long way toward deterring abuse -- an issue that plagues the current standard-of-care acute pain relievers like morphine and hydromorphone.

What's the main attraction for investors? Due to the high unmet medical need that Dsuvia addresses -- namely, a sublingual opioid dosed in precise amounts -- AcelRx thinks this drug can eventually generate more than $1 billion in annual sales. That forward-looking sales estimate absolutely dwarfs the company's present market cap of $262 million, implying that this stock is a downright bargain at these levels.

What's the catch? Although AcelRx is slated to launch Dsuvia in the first quarter of 2019, Wall Street doesn't think the drug will get off to a blistering start commercially. The key concerns are AcelRx's need to build a sales force from the ground up, the company's inexperience in dealing with insurance companies in general, and of course, the uncertainty surrounding Dsuvia's real-world adoption rate among prescribers.

The good news is that none of these issues are deal breakers. Over time, AcelRx should be able to cobble together a formidable sales team, as well as convince payers and prescribers alike of the drug's benefits over traditional acute pain medications -- especially for its intended target market. So while AcelRx's stock might not take off right away, it should turn out to be a stellar long-term biotech play.