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Basis of Presentation and Significant Accounting Policies [Text Block]

Organization and Summary of Significant Accounting Policies

AcelRx Pharmaceuticals, Inc., or the Company or AcelRx, was incorporated in Delaware on

July 13, 2005

as SuRx, Inc., and in

January 2006,

the Company changed its name to AcelRx Pharmaceuticals, Inc. The Company

’s operations are based in Redwood City, California.

AcelRx is a specialty pharmaceutical company focused on the development and commercialization of innovative therapies for the treatment of acute pain.

AcelRx’s

two

product candidates, DSUVIA

™

(known as ARX-

outside of the United States), and ZALVISO

, each utilize sublingual sufentanil, delivered via a non-invasive route of sublingual administration. Subject to obtaining regulatory approvals, AcelRx anticipates developing a distribution capability and commercial organization in the United States to market and sell DSUVIA in the United States by itself, and potentially, in certain European Economic Area, or EEA, countries with strategic partners. In geographies where AcelRx decides

not

to commercialize products by itself, the Company

may

seek to out-license commercialization rights. AcelRx intends to seek regulatory approval for ZALVISO in the United States and, if successful, potentially promote ZALVISO either by itself or with strategic partners.

DSUVIA

DSUVIA, is a

mcg sufentanil sublingual tablet in a single-dose applicator intended for the treatment of moderate-to-severe acute pain administered by a healthcare professional. DSUVIA was initially developed at the request of the U.S. Department of Defense as a replacement for injections of morphine on the battlefield. In addition to the military application, AcelRx is developing DSUVIA for the treatment of patients suffering from moderate-to-severe acute pain in multiple settings, such as emergency room patients; patients who are recovering from short-stay or ambulatory surgery and do

not

require more long-term analgesia; post-operative patients who are transitioning from the operating room to the recovery floor;

certain types of office-based or hospital-based procedures; patients being treated and transported by paramedics. The Company completed the Phase

clinical program for DSUVIA and in

February 2017

a New Drug Application, or NDA, was accepted for filing by the U.S. Food and Drug Administration, or FDA, for DSUVIA for the treatment of moderate-to-severe acute pain to be administered by a healthcare professional in medically supervised settings. On

October 12, 2017,

the Company received a Complete Response Letter, or CRL, from the FDA regarding its NDA for DSUVIA which states the FDA determined it cannot approve the NDA in its present form and provides recommendations for resubmission. The CRL contained

two

primary recommendations. First, while the safety database was suitable in number of patients, the collection of additional data was requested on at least

patients to assess the safety of DSUVIA dosed at the maximum amount described in the proposed labelling. Second, to ensure proper administration of the tablet with the single-dose applicator, the FDA recommended certain changes to the Directions for Use to address use-related errors, including dropped tablets, which changes would need to be validated through a Human Factors study. AcelRx has requested a Type A post-action

meeting with the FDA to discuss the topics covered in the CRL and expects to confirm plans to move towards resubmission of the DSUVIA NDA. In

March 2017,

the European Medicines Agency, or EMA, notified the Company that the ARX-

(sufentanil sublingual tablet,

mcg) Marketing Authorisation Application, or MAA, has passed validation, and that the scientific review of the MAA is underway. The MAA for ARX-

was filed for the treatment of patients with moderate-to-severe acute pain in a medically supervised setting. AcelRx expects an opinion on the MAA from the Committee for Medicinal Products for Human Use, or CHMP, in the

first

half of

2018.

ZALVISO

ZALVISO delivers

mcg sufentanil sublingually through a non-invasive delivery route via a pre-programmed, patient-controlled analgesia

, or PCA, system. ZALVISO is approved in the EEA, Norway, Iceland and Liechtenstein and is in late-stage development in the U.S. The Company had initially submitted to the FDA an NDA seeking approval for ZALVISO in

September 2013

but received a CRL on

July 25, 2014.

Subsequently, the FDA requested an additional clinical study,

IAP312,

designed to evaluate the effectiveness of changes made to the functionality and usability of the ZALVISO device and to take into account comments from the FDA on the study protocol. In the

IAP312

study, for which top-line results were announced in

August 2017,

ZALVISO met safety, satisfaction and device usability expectations. These results will supplement the

three

Phase

trials already completed in the ZALVISO NDA resubmission. The Company remains on track for the resubmission of the NDA for ZALVISO by the end of

2017

and intends to resubmit the ZALVISO NDA after the Type A post-action meeting with the FDA regarding the DSUVIA CRL.

December 16, 2013,

AcelRx and Grünenthal GmbH, or Grünenthal, entered into a Collaboration and License Agreement, or the License Agreement, which was amended effective

July 17, 2015

and

September 20, 2016,

or the Amended License Agreement, which grants Grünenthal rights to commercialize ZALVISO

PCA system, or the Product, in the countries of the EU, Switzerland, Liechtenstein, Iceland, Norway and Australia (collectively, the Territory) for human use in pain treatment within, or dispensed by, hospitals, hospices, nursing homes and other medically supervised settings, or the Field. In

September 2015,

the European Commission, or EC, approved the Marketing Authorization Application, or MAA, previously submitted to the European Medicines Agency, or EMA, for ZALVISO for the management of acute moderate-to-severe post-operative pain in adult patients. The approval allows Grünenthal to market ZALVISO in the

EU member states as well as for the EEA, Norway, Iceland and Liechtenstein, or EEA. Also on

December 16, 2013,

AcelRx and Grünenthal, entered into a related Manufacture and Supply Agreement, or the MSA, and together with the License Agreement, the Agreements. Under the MSA, the Company will exclusively manufacture and supply the Product to Grünenthal for the Field in the Territory. On

July 22, 2015,

the Company entered into an amendment to the MSA, or the MSA Amendment, and together with the MSA, the Amended MSA, between the Company and Grünenthal, effective as of

July 17, 2015,

and together with the Amended License Agreement, the Amended Agreements.

Grünenthal has initially deployed the ZALVISO System in a limited number of hospitals in targeted countries under a pilot program, whereby the hospital will use ZALVISO in a small number of post-operative patients. Pilot programs are expected to last several months after which ZALVISO

may

be available for commercial sale

. ZALVISO has been commercially launched in Germany, France, Belgium, Netherlands, Italy, the UK, Spain, Portugal and Austria, and is expected to be commercially launched in

2017

in Ireland. Royalty revenues and non-cash royalty revenues from the commercial sales of ZALVISO in the EU are expected to be minimal for

2017.

The Company has incurred recurring operating losses and negative cash flows from operating activities since inception

. Although ZALVISO has been approved for sale in the EU, the Company sold the majority of the royalty rights and certain commercial sales milestones it is entitled to receive under the Amended License Agreement with Grünenthal to PDL BioPharma, Inc., or PDL. As a result, the Company expects to continue to incur operating losses and negative cash flows.

When we refer to "we," "our," "us," the "Company" or "AcelRx" in this document, we mean AcelRx Pharmaceuticals, Inc. and its consolidated subsidiary.

Principles of Consolidation

The

condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, ARPI LLC, which was formed in

September 2015

for the sole purpose of facilitating the monetization transaction with PDL of the expected royalty stream and milestone payments due from the sales of ZALVISO in the European Union by its commercial partner, Grünenthal, pursuant to the Amended License Agreement, or the Royalty Monetization. All intercompany accounts and transactions have been eliminated in consolidation. Refer to Note

“Liability Related to Sale of Future Royalties” for additional information.

Reclassifications

Certain prior year amounts in the

condensed consolidated financial statements have been reclassified to conform to the current year's presentation.

Basis of Presentation

The accompanying unaudited condensed

consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the rules and regulations of the U.S. Securities and Exchange Commission, or SEC. Accordingly, they do

not

include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.

Operating results

for the

nine

months ended

September 30, 2017,

are

not

necessarily indicative of the results that

may

be expected for the year ending

December

31,

2017.

The condensed consolidated balance sheet as of

December

31,

2016,

was derived from the Company’s audited financial statements as of

December

31,

2016,

included in the Company’s Annual Report on Form

-K filed with the SEC. These financial statements should be read in conjunction with the Company’s Annual Report on Form

-K for the year ended

December

31,

2016,

which includes a broader discussion of the Company’s business and the risks inherent therein.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the condensed

consolidated financial statements and accompanying notes. Management evaluates its estimates on an ongoing basis including critical accounting policies. Estimates are based on historical experience and on various other market-specific and other relevant assumptions that the Company believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are

not

readily apparent from other sources. Actual results could differ from those estimates.

Significant Accounting Policies

The Company

’s significant accounting policies are detailed in its Annual Report on Form

-K for the year ended

December 31, 2016.

During the

nine

months ended

September 30, 2017,

there have been

significant changes to the Company’s significant accounting policies from those previously disclosed in its Annual Report on Form

-K.

Recently Adopted Accounting Standards

March 2016,

the FASB issued ASU

No.

2016

09,

Compensation - Stock Compensation (Topic

718

)

, which is part of the FASB's Simplification Initiative. The updated guidance simplifies the accounting for share-based payment transactions. The amended guidance is effective for fiscal years, and interim periods within those years, beginning after

December 15, 2016,

with early adoption permitted. Under this guidance, on a prospective basis, companies will

longer record excess tax benefits and certain tax deficiencies as additional paid-in capital. Instead, they will record all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement. In addition, the guidance eliminates the requirement that excess tax benefits be realized before companies can recognize them. The ASU requires a cumulative-effect adjustment for previously unrecognized excess tax benefits in opening retained earnings in the annual period of adoption. Effective

January 1, 2017,

the Company adopted this updated guidance. Upon adoption, the Company recognized additional excess tax benefit as a deferred tax asset with a corresponding increase to our deferred tax asset valuation allowance, which did

not

result in a net impact to retained earnings, and elected to recognize forfeitures when they occur using a modified retrospective approach, which did

not

have a material impact on its condensed consolidated financial statements.

July 2015,

the FASB issued ASU

No.

2015

11,

Inventory (Topic

330

) Related to Simplifying the Measurement of Inventory

which applies to all inventory measured using

first

-in,

first

-out (“FIFO”) or average cost. Inventory within the scope of the new guidance should be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU

No.

2015

was adopted by the Company beginning in fiscal

2017,

and did

not

have a material impact on its condensed consolidated financial statements.

Recently Issued Accounting Standards

May 2017,

the FASB issued ASU

2017

09,

Compensation - Stock Compensation (Topic

718

Scope of Modification Accounting

, to clarify which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting under ASC

718.

Under the new guidance, an entity will

not

apply modification accounting to a share-based payment award if all of the following remain unchanged immediately before and after the change of terms and conditions:

•

The award’s fair value (or calculated value or intrinsic value, if those measurement methods are used),

•

The award’s vesting conditions, and

•

The award’s classification as an equity or liability instrument.

ASU

2017

is effective for annual periods, and interim periods within those annual periods, beginning after

December 15, 2017

for all entities. Early adoption is permitted, including adoption in any interim period for which financial statements have

not

yet been issued or made available for issuance. The ASU will be applied prospectively to awards modified on or after the adoption date. The Company does

not

expect the adoption of ASU

2017

to have a material effect on its results of operations, financial condition or cash flows.

November 2016,

the FASB issued ASU

No.

2016

18,

Statement of Cash Flows (Topic

230

): Restricted Cash

. ASU

No.

2016

is intended to reduce diversity in practice in the classification and presentation of changes in restricted cash on the condensed consolidated statement of cash flows. The ASU requires that the condensed consolidated statement of cash flows explain the change in total cash and equivalents and amounts generally described as restricted cash or restricted cash equivalents when reconciling the beginning-of-period and end-of-period total amounts. The ASU also requires a reconciliation between the total of cash and equivalents and restricted cash presented on the condensed consolidated statement of cash flows and the cash and equivalents balance presented on the condensed consolidated balance sheet. ASU

2016

is effective retrospectively on

January 1, 2018,

with early adoption permitted. The Company does

not

expect the adoption of ASU

2016

to have a material effect on its results of operations, financial condition or cash flows.

August 2016,

the

FASB issued ASU

No.

2016

15,

Statement of Cash Flows (Topic

230

): Classification of Certain Cash Receipts and Cash Payments,

addressing

eight

specific cash flow issues in an effort to reduce diversity in practice. The amended guidance is effective for fiscal years beginning after

December 15, 2017,

and for interim periods within those years. Early adoption is permitted. The Company does

not

expect the amended guidance to have a material impact on its statements of cash flows.

February 2016,

the FASB issued ASU

No.

2016

02,

Leases (Topic

842

)

, which establishes a new lease accounting model for lessees. The updated guidance requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. The amended guidance is effective for fiscal years, and interim periods within those years, beginning after

December 15, 2018,

with early adoption permitted. The Company has

not

yet selected a transition date, and is currently evaluating the impact of the adoption of this standard on its condensed consolidated financial statements.

May 2014,

the FASB issued ASU

No.

2014

09,

Revenue from Contracts with Customers

, to provide guidance on revenue recognition. ASU

No.

2014

requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under today’s guidance. These

may

include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. In

August 2015,

the FASB issued ASU

No.

2015

14,

Revenue from Contracts with Customers (Topic

606

): Deferral of the Effective Date

, which provided for the adoption of the new standard for fiscal years beginning after

December 15, 2017.

Accordingly, ASU

No.

2014

is effective for the Company in the

first

quarter of

2018.

Early adoption up to the

first

quarter of

2017

is permitted. Upon adoption, ASU

No.

2014

can be applied retrospectively to all periods presented or only to the most current period presented with the cumulative effect of changes reflected in the opening balance of retained earnings in the most current period presented. The FASB has also issued the following standards which clarify ASU

No.

2014

and have the same effective date as the original standard:

	●	ASU No. 2016 - 08, Revenue from Contracts with Customers (Topic 606 ): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) ;
	●	ASU No. 2016 - 10, Identifying Performance Obligations and Licensing (Topic 606 );
	●	ASU No. 2016 - 11, Revenue Recognition (Topic 605 ) and Derivatives and Hedging (Topic 815 ): Rescission of SEC Guidance Because of Accounting Standards Updates 2014 - 09 and 2014 - 16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting;
	●	ASU No. 2016 - 12, Revenue from Contracts with Customers (Topic 606 ): Narrow-Scope Improvements and Practical Expedients ; and
	●	ASU No. 2016 - 20, Revenue from Contracts with Customers (Topic 606 ): Technical Corrections and Improvements .

The Company anticipates adoption of the new standard effective

January 1, 2018

under the modified retrospective transition

method. The initial analysis identifying areas that will be impacted by the new guidance is substantially complete, and the Company is currently analyzing the potential impacts to the condensed consolidated financial statements and related disclosures, including the areas of variable consideration and new disclosure requirements. While the Company is still in the process of its evaluation of its contract with the U.S. Department of Defense and the Amended Agreements with its collaboration partner Grünenthal, the Company currently believes that the impact of adoption of the new standard to its financial statements will

not

be material. As the Company completes its evaluation of the new standard, new information

may

arise that could change the Company’s understanding of the impact to its financial statements. The Company will continue to monitor additional modifications, clarifications or interpretations undertaken by the FASB that

may

impact its current conclusions, and will expand its analysis to include any new revenue arrangements initiated prior to adoption.

Note 2 - Investments and Fair Value Measurement

9 Months Ended

Sep. 30, 2017

Investments and Fair Value Measurement Disclosure [Text Block]

Investments and Fair Value Measurement

Investments

The Company classifies its marketable securities as available-for-sale and records its investments at fair value. Available-for-sale securities are carried at estimated fair value based on quoted market prices

or observable market inputs of almost identical assets, with the unrealized holding gains and losses included in accumulated other comprehensive income. Marketable securities which have maturities beyond

one

year as of the end of the reporting period are classified as non-current.

The table below summarizes the Company

’s cash, cash equivalents and investments (in thousands):

	As of September 30 , 201 7
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Cash and cash equivalents:
Cash	$	37,313	$	—	$	—	$	37,313
U.S. government agency securities		30,623		—		—		30,623

Total cash and cash equivalents		67,936		—		—		67,936

Total cash, cash equivalents and investments	$	67,936	$	—	$	—	$	67,936

	As of December 31, 201 6
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Cash and cash equivalents:
Cash	$	49,833	$	—	$	—	$	49,833
U.S. government agency securities		30,474		3		—		30,477

Total cash and cash equivalents		80,307		3		—		80,310

Total cash, cash equivalents and investments	$	80,307	$	3	$	—	$	80,310

As of

September 30, 2017

and

December

31,

2016,

none

of the available-for-sale securities held by the Company had material unrealized losses. There were

other-than-temporary impairments for these securities at

September 30, 2017

December

31,

2016.

gross realized gains or losses were recognized on the available-for-sale securities and, accordingly, there were

amounts reclassified out of accumulated other comprehensive income to earnings during the

three

and

nine

months ended

September 30, 2017

and

2016.

As of

September 30, 2017

and

December

31,

2016,

the contractual maturity of all investments held was less than

one

year.

Fair Value Measurement

The Company

’s financial instruments consist of Level II assets and Level III liabilities. For Level II instruments, the Company estimates fair value by utilizing

third

party pricing services in developing fair value measurements where fair value is based on valuation methodologies such as models using observable market inputs, including benchmark yields, reported trades, broker/dealer quotes, bids, offers and other reference data. Such Level II instruments typically include U.S. treasury and U.S. government agency obligations. As of

September 30, 2017

and

December 31, 2016,

the Company held, in addition to Level II assets, a contingent put option liability associated with the Company’s Amended and Restated Loan and Security Agreement, or the Original Loan Agreement, with Hercules Technology II, L.P. and Hercules Capital, Inc., formerly known as Hercules Technology Growth Capital, Inc., collectively referred to as the Lenders, which amended and restated the Loan and Security Agreement dated as of

June 29, 2011,

which was classified as a Level III liability. On

March 2, 2017,

the Company entered into an Amended and Restated Loan and Security Agreement, or the Amended Loan Agreement with Hercules Capital Funding Trust

2014

and Hercules Technology II, L.P., together, Hercules. The Amended Loan Agreement amends and restates the Original Loan Agreement. See Note

“Long-Term Debt” for further description. The Company’s estimate of fair value of the contingent put option liability was determined by using a risk-neutral valuation model, wherein the fair value of the underlying debt facility is estimated both with and without the presence of the default provisions, holding all other assumptions constant. The resulting difference between the

two

estimated fair values is the estimated fair value of the default provisions, or the contingent put option. Changes to the estimated fair value of these liabilities are recorded in interest income and other income (expense), net in the condensed consolidated statements of comprehensive loss. The fair value of the underlying debt facility is estimated by calculating the expected cash flows in consideration of an estimated probability of default and expected recovery rate in default, and discounting such cash flows back to the reporting date using a risk-free rate.

As of

September 30, 2017

and

December 31, 2016,

the Company also held a Level III liability associated with warrants, or PIPE warrants, issued in connection with the Company’s private placement equity offering, completed in

June 2012.

For a detailed description, see Note

“Warrants.” The PIPE warrants are considered a liability and are valued using the Black-Scholes option-pricing model, the inputs for which include exercise price of the PIPE warrants, market price of the underlying common shares, expected term, volatility based on a group of the Company’s peers and the risk-free rate corresponding to the expected term of the PIPE warrants. Changes to any of these inputs can have a significant impact to the estimated fair value of the PIPE warrants. The following table sets forth the fair value of the Company’s financial assets and liabilities by level within the fair value hierarchy (in thousands):

	As of September 30 , 201 7
	Fair Value		Level I		Level II		Level III
Assets
U.S. government agency obligations	$	30,623	$	—	$	30,623	$	—

Total assets measured at fair value	$	30,623	$	—	$	30,623	$	—

Liabilities
PIPE warrant s	$	640		—		—	$	640
Contingent put option liability		207		—		—		207

Total liabilities measured at fair value	$	847	$	—	$	—	$	847

	As of December 31, 201 6
	Fair Value		Level I		Level II		Level III
Assets
U.S. government agency obligations	$	30,477	$	—	$	30,477	$	—

Total assets measured at fair value	$	30,477	$	—	$	30,477	$	—

Liabilities
PIPE warrant s	$	288		—		—	$	288
Contingent put option liability		124		—		—		124

Total liabilities measured at fair value	$	412	$	—	$	—	$	412

The following table sets forth the assumptions used in the Black-Scholes option-pricing model to estimate the fair value of the PIPE warrants as of

September 30, 2017

and

December

31,

2016:

	As of September 30 , 2017			As of December 31, 2016
Market Price	$	4.60		$	2.60
Exercise Price	$	3.40		$	3.40
Risk-free interest rate		1.01	%		0.85	%
Expected volatility		57.0	%		81.0	%
Expected life (in years)		0.17			0.92
Expected dividend yield		0.0	%		0.0	%

The following tables set forth a summary of the changes in the fair value of the Company

’s Level III financial liabilities for the

three

and

nine

months ended

September 30, 2017

and

September 30, 2016 (

in thousands):

	Three Months Ended September 30, 2017			Nine Months Ended September 30, 2017
Fair value —beginning of period	$	288		$	412
Change in fair value of PIPE warrants		612			352
Change in fair value of contingent put option associated with Original Loan Agreement with Hercules		(53	)		83

Fair value —end of period	$	847		$	847

	Three Months Ended September 30, 2016		Nine Months Ended September 30, 2016
Fair value —beginning of period	$	605	$	1,179
Change in fair value of PIPE warrants		392		(81	)
Change in fair value of contingent put option associated with Original Loan Agreement with Hercules		10		(91	)

Fair value —end of period	$	1,007	$	1,007

Note 3 - Inventories

9 Months Ended

Sep. 30, 2017

Inventory Disclosure [Text Block]

Inventories

Inventories consist of finished goods, raw materials and work in process and are stated at the lower of cost or market and consist of the following (in thousands):

	Balance as of
	September 30 , 201 7		December 31, 201 6
Raw materials	$	812	$	1,126
Work-in-process		157		296
Finished goods		—		732
Total	$	969	$	2,154

The Company periodically evaluates the carrying value of inventory on hand for potential excess amount over demand using the same lower of cost or market approach as that used to value the inventory. During the

nine

months ended

September 30, 2017,

the Company recorded an inventory impairment charge of

$0.4

million, primarily for ZALVISO raw materials inventory on hand, plus related purchase commitments.

Note 4 - U.S. Department of Defense Contract	9 Months Ended
Note 4 - U.S. Department of Defense Contract	Sep. 30, 2017
Notes to Financial Statements
Long-term Contracts or Programs Disclosure [Text Block]	4 . U.S. Department of Defense Contract On May 11, 2015, the Company entered into an award contract (referred to as the DoD Contract) supported by the Clinical and Rehabilitative Medicine Research Program, or CRMRP, of the United States Army Medical Research and Materiel Command, or the USAMRMC, within the U.S. Department of Defense, or the DoD, in which the DoD agreed to provide up to $17.0 million to the Company in order to support the development of DSUVIA (sufentanil sublingual tablet, 30 mcg), a proprietary, non-invasive, single-use tablet in a disposable, pre-filled single-dose applicator, or SDA, for the treatment of moderate-to-severe acute pain. Under the terms of the DoD Contract, the DoD has and continues to reimburse the Company for costs incurred for development, manufacturing, regulatory and clinical costs outlined in the DoD Contract, including reimbursement for certain personnel and overhead expenses. The period of performance under the DoD Contract began on May 11, 2015. The DoD Contract gives the DoD the option to extend the term of the DoD Contract and provide additional funding for the research. On March 2, 2016, the DoD Contract was amended to approve enrollment of additional patients in the SAP302 study, approve the addition of the SAP303 study, and extend the DoD Contract period of performance by four months from November 10, 2016 to March 9, 2017, to accommodate the increased SAP302 patient enrollment and the SAP303 study. The costs for these changes were absorbed within the current DoD Contract value. On March 9, 2017, the DoD Contract was amended to incorporate additional activities including the development and testing of packaging changes; additional stability testing; and preparation for any FDA advisory committee meeting for DSUVIA. The amendment also extends the DoD Contract period of performance by 11 months through February 28, 2018 to accommodate these additional activities. If DSUVIA is approved by the FDA, the DoD has the option to purchase a certain number of units of commercial product pursuant to the terms of the DoD Contract. Revenue is recognized based on expenses incurred by the Company in conducting research and development activities, including overhead, as set forth in the agreement. Revenue attributable to the research and development performed under the DoD Contract, recorded as contract and other revenue in the condensed consolidated statements of comprehensive loss, was $0.3 million and $0.8 million for the three and nine months ended September 30, 2017, respectively, and $1.8 million and $6.2 million for the three and nine months ended September 30, 2016, respectively.

Note 5 - Collaboration Agreement

9 Months Ended

Sep. 30, 2017

Collaborative Arrangement Disclosure [Text Block]

. Collaboration

Agreement

As described in Note

“Organization and Summary of Significant Accounting Policies,”

the Company has entered into amendments to the Agreements with Grünenthal related to ZALVISO. In the Amended Agreements, the parties amended the Product supply configurations and packaging of Product components and accessories, and associated pricing therefor, which the Company will manufacture and supply to Grünenthal for the Territory. The parties agreed to increase the pricing of the Product components and accessories in exchange for a reduction of

$5.5

million in the total milestone payments due from Grünenthal contingent upon achieving specified net sales targets from a total of

$171.5

million to

$166.0

million. The parties also updated the development plan for the Product in the Territory, providing for additional near-term development services to be rendered by AcelRx in exchange for payments by Grünenthal of

$0.7

million. In accordance with the terms of the Amended MSA, AcelRx also received a binding Product forecast from Grünenthal for approximately

$3.7

million, which was fully delivered by the end of

2016.

Amended License Agreement

Under the terms of the Amended License Agreement, Grünenthal has the exclusive right to commercialize the Product in the Field in the Territory. The Company retains control of clinical development, while Grünenthal and the Company will be responsible for certain development activities pursuant to a development plan as agreed between the parties. The Company will

not

receive separate payment for such development activities, apart from the

$0.7

million

described above. Grünenthal is exclusively responsible for marketing approval applications and other regulatory filings relating to the sufentanil sublingual tablet drug cartridge for the Product in the Field in the Territory, while the Company is responsible for the CE Mark and other regulatory filings relating to device portions of the Product. A CE Mark for ZALVISO was obtained in the

fourth

quarter of

2014

which specifies AcelRx as the device design authority and manufacturer. In

September 2015,

the EC approved the MAA for ZALVISO (

mcg sufentanil sublingual tablets) for the management of acute moderate-to-severe post-operative pain in adult patients for the

EU member states as well as for the EEA. In

April 2016,

Grünenthal completed the

first

commercial sale of ZALVISO.

The Company received an upfront non-refundable cash payment of

$30.0

million in

December 2013,

and a milestone payment of

$5.0

million related to the MAA submission in the

third

quarter of

2014,

and an additional

$15.0

million milestone payment upon the EC approval. Under the Amended License Agreement, the Company is eligible to receive approximately

$194.5

million in additional milestone payments, based upon successful regulatory and product development efforts to be agreed between Grünenthal and the Company (

$28.5

million) and net sales target achievements (

$166.0

million). Grünenthal will also make tiered royalty and supply and trademark fee payments in the mid-teens up to the mid-twenties percent range, depending on the level of sales achieved, on net sales of ZALVISO.

A portion of the tiered royalty payment, exclusive of the supply and trademark fee payments, will be paid to PDL in connection with the Royalty Monetization. For additional information on the Royalty Monetization with PDL, see Note

“Liability Related to Sale of Future Royalties”. Unless earlier terminated, the Amended License Agreement continues in effect until the expiration of the obligation of Grünenthal to make royalty and supply and trademark fee payments, which supply and trademark fee continues for so long as the Company continues to supply the Product to Grünenthal. The Amended License Agreement is subject to earlier termination in the event the parties mutually agree, by a party in the event of an uncured material breach by the other party, upon the bankruptcy or insolvency of either party, or by Grünenthal for convenience.

Amended MSA

Under the terms of the Amended MSA, the Company will manufacture and supply the Product for use in the Field for the Territory exclusively for Grünenthal. Grünenthal shall purchase from AcelRx, during the

first

five

years after the effective date of the MSA

, or

December 16, 2013

through

December 15, 2018,

100%

and thereafter

80%

of Grünenthal’s and its sublicensees’ and distributors’ requirements of Product for use in the Field for the Territory. The Product will be supplied at prices approximating the Company’s direct manufacturing cost, subject to certain caps, as defined in the MSA Amendment. The MSA Amendment requires the Company to use commercially reasonable efforts to enter stand-by contracts with

third

parties providing significant supply and manufacturing services and, under certain specified conditions, permits Grünenthal to use a

third

party back-up manufacturer to manufacture the Product for Grünenthal’s commercial sale in the Territory.

Unless earlier terminated, the Amended MSA continues in effect until the later of the expiration of the obligation of Grünenthal to make royalty and supply and trademark fee payments or the end of any transition period for manufacturing obligations due to the expiration or termination of the Amended License Agreement. The Amended MSA is subject to earlier termination in connection with certain termination events in the Amended License Agreement, in the event the parties mutually agree, by a party in the event of an uncured material breach by the other party or upon the bankruptcy or insolvency of either party.

The Company identified the following

four

significant non-contingent performance deliverables under the original Agreements:

(

) intellectual property (license), (

) the obligation to provide research and development services, (

) the significant and incremental discount on the manufacturing of ZALVISO for commercial purposes, and (

) the obligation to participate on the joint steering committee.

At the time the Amended Agreements were executed, with the exception of the intellectual property license, these obligations remained partially undelivered. Additionally, the Company identified the following

three

performance deliverables under the License Amendment and the MSA Amendment:

(

) the obligation to provide additional research and development services, (

) the obligation to provide ZALVISO demonstration device systems, and (

) the obligation to manufacture and deliver Product under the binding forecast. The Company determined that the License Amendment and MSA Amendment are modifications to the original Agreements.

The Company considered the provisions of the multiple-element arrangement guidance in determining whether the deliverables outlined above have standalone value and thus should be treated as separate units of accounting. The Company

’s management determined that the license under the original License Agreement had standalone value and represented a separate unit of accounting because the rights conveyed permitted Grünenthal to perform all efforts necessary to commercialize and begin selling the product upon regulatory approval. In addition, Grünenthal has the appropriate development, regulatory and commercial expertise with products similar to the product licensed under the agreement and has the ability to engage

third

parties to manufacture the product allowing Grünenthal to realize the value of the license without receiving any of the remaining deliverables. Grünenthal can also sublicense its license rights to

third

parties. Also, the Company’s management determined that the research and development services, ZALVISO demonstration device systems, joint steering committee participation, the significant and incremental discount on the manufacturing of ZALVISO, and the obligation to manufacture and deliver Products each represent individual units of accounting, as Grünenthal could perform such services and/or could acquire these on a separate basis.

The Company believes that

none

of the deliverables have vendor-specific objective evidence, or VSOE, or sufficient

third

-party evidence, or TPE, of selling price, as

none

of them have been sold separately by the Company, and as there is only limited information about

third

party pricing for similar deliverables. Accordingly, the Company developed best estimates of selling prices, or BESP, for each deliverable in order to allocate the noncontingent arrangement consideration to the units of accounting, based on current information available as of the modification date.

The Company

’s management determined the best estimate of selling price for the license based on Grünenthal’s estimated future cash flows arising from the arrangement. Embedded in the estimate were significant assumptions regarding regulatory expenses, revenue, including potential customer market for the product and product price, costs to manufacture the product and the discount rate. The Company’s management determined the best estimate of selling price of the research and development services and committee participation based on the nature and timing of the services to be performed and in consideration of personnel and other costs incurred in the delivery of the services. For the discount on manufacturing services, the Company’s management estimated the selling price based on the market level of contract manufacturing margin it could have received if it were engaged to supply products to a customer in a separate transaction, the estimated cost of manufacturing, and the anticipated volume of Grünenthal’s orders over the course of the agreement, to which the discount would apply. For the ZALVISO demonstration devices and the obligation to manufacture and deliver Product, the Company’s management estimated the selling price based on the binding volume of such devices and Products, the estimated cost of manufacturing, and the market level of contract manufacturing margin. BESP of the license, research and development and committee participation services and the discount on manufacturing services were updated at the time the Amended Agreements were executed for purposes of allocating the amended arrangement consideration.

The Amended Agreements entitle the Company to receive additional payments upon the achievement of certain development and sales milestones. Based on ASC Topic

605

28,

Revenue Recognition — Milestone Method

, the Company evaluates contingent milestones at inception or modification of the agreement, and recognizes consideration that is contingent upon the achievement of a milestone in its entirety as revenue in the period in which the milestone is achieved only if the milestone is considered substantive in its entirety. Milestones are events which have the following characteristics: (i) they can be achieved based in whole or in part on either the Company’s performance or on the occurrence of a specific outcome resulting from the Company’s performance, (ii) there was substantive uncertainty at the date the agreement was entered into that the event would be achieved and, (iii) they would result in additional payments due to the Company. A milestone is considered substantive if the following criteria are met: (i) the consideration is commensurate with either (

) the entity’s performance to achieve the milestone, or (

) the enhancement of the value of the delivered item (s) as a result of a specific outcome resulting from the entity’s performance to achieve the milestone, (ii) the consideration relates solely to past performance and, (iii) the consideration is reasonable relative to all of the other deliverables and payment terms, including other potential milestone consideration, within the arrangement.

The substantive milestone payments will be recognized as revenue in their entirety upon the achievement of each substantive milestone. Based on the criteria noted above, the identified substantive milestones in the original Agreements pertain to post approval product enhancements, expanded market opportunities and manufacturing efficiencies for ZALVISO. Each of these potential achievements is based primarily on the Company

’s performance and involves substantive uncertainty as achievement of these milestones requires future research, development and regulatory activities, which are inherently uncertain in nature. The Company determined that the consideration for each milestone was commensurate with the Company’s performance to achieve the milestone, including future research, development, manufacturing and regulatory activities and that the consideration is reasonable relative to all of the other deliverables and payments within the arrangement. Aggregate potential payments for these milestones total

$28.5

million.

In addition to substantive milestones,

two

milestones associated with the original Agreements were deemed

not

to be substantive. These milestones pertain to regulatory developments for ZALVISO in Europe, which the Company

’s management deemed to be

not

substantive due to the high likelihood of achievement, both at inception of the original Agreements and at the time the Amended Agreements were executed. Aggregate potential payments for these milestones totaled

$20.0

million. In

July 2014,

Grünenthal submitted an MAA to the EMA for ZALVISO for the management of acute moderate-to-severe post-operative pain in adult patients, triggering the

first

of these

two

milestones, a cash payment of

$5.0

million. In

September

2015,

the MAA was approved by the EC, triggering the

second

of these

two

milestones, a cash payment of

$15.0

million. Amounts received under these non-substantive milestones were allocated to performance deliverables based on the relative selling price method and recognized as appropriate for such deliverables.

The Amended Agreements also include milestone payments related to specified net sales targets, totaling

$166.0

million. These milestones do

not

meet the definition of a milestone under ASU

2010

because the achievement of these milestones is solely dependent on counter-party performance and

not

on any performance obligations of the Company.

At the time the Amended Agreements were executed, approximately

$33.3

million of revenue had been recognized, and

$1.7

million remained unrecognized from the aggregate to-date consideration of

$35.0

million received under the original Agreements. Upon execution of the Amended Agreements, the Company updated the allocation of this arrangement consideration, along with the consideration owed under the Amended Agreements totaling

$54.4

million, consisting of

$0.7

million related to research and development services and the demonstration device systems, and

$3.7

million related to the Product binding purchase forecast, to all of the identified deliverables in the arrangement (both delivered and undelivered) using their relative selling prices. Further, the

$15.0

million non-substantive milestone achieved in

September

2015

was also allocated to the deliverables in the same manner. As a result of such allocations, additional amounts of

$13.2

million and

$0.5

million were allocated to the previously delivered license and research and development and committee participation services, respectively. A total of

$4.4

million was allocated to the significant and incremental discount on manufacturing services, and is expected to be recognized over the period such discount is made available to Grünenthal, beginning in

February 2016,

on a straight-line basis over the estimated period through

2029.

An additional

$0.2

million has been allocated to committee participation services and is recognized on a straight-line basis over the performance obligation period extending through

2018.

A total of

$2.3

million was allocated to manufacturing services for the binding forecast of Products. The remaining

$0.5

million was allocated to the additional research and development services under the Amended License Agreement and demonstration device systems, and manufacturing and delivery of the Products, and will be recognized as those services are performed or as the devices are delivered, as applicable.

Below is a summary of revenue recognized under the Amended Agreements during

the

three

and

nine

months ended

September 30, 2017

and

2016

(in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Product sales	$	1,110	$	1,369	$	6,024	$	4,329
Joint steering committee, research and development services and demonstration devices		11		189		255		336
Non-cash royalty revenue related to Royalty Monetization (See Note 7)		78		3		124		3
Royalty revenue		26		1		41		1
Total	$	1,225	$	1,562	$	6,444	$	4,669

As of

September 30, 2017,

the Company had current and noncurrent portions of the deferred revenue balance under the Amended Agreements of

$0.4

million and

$3.6

million, respectively.

Note 6 - Long-term Debt	9 Months Ended
Note 6 - Long-term Debt	Sep. 30, 2017
Notes to Financial Statements
Long-term Debt [Text Block]	6 . Long-Term Debt Amended and Restated Loan and Security Agreement In June 2011, AcelRx entered into the Loan and Security Agreement, with the Lenders, under which AcelRx borrowed $20.0 million in two tranches of $10.0 million each, represented by secured term promissory notes. The Company’s obligations associated with the agreement are secured by a security interest in substantially all of its assets, other than its intellectual property and those assets sold under the Royalty Monetization . The Company borrowed the first tranche of $10.0 million upon the closing of the transaction on June 29, 2011 and borrowed the second tranche of $10.0 million in December 2011. The Company used a portion of the proceeds from the first tranche to repay the remaining obligations under that certain loan and security agreement between the Company and Pinnacle Ventures, L.L.C., or Pinnacle Ventures, dated September 16, 2008. The interest rate for each tranche was 8.50%. In connection with the loan, the Company issued the Lenders seven -year warrants to purchase an aggregate of 274,508 shares of common stock at a price of $3.06 per share, all of which have been exercised. On December 16, 2013, AcelRx entered into an Amended and Restated Loan and Security Agreement with the Lenders, or the Original Loan Agreement, under which the Company was provided the ability to borrow up to $40.0 million in three tranches. The loans were represented by secured term promissory notes, collectively, the 2013 Notes. The Original Loan Agreement amended and restated the prior Loan and Security Agreement between the Company and the Lenders dated as of June 29, 2011. The Company borrowed the first tranche of $15.0 million upon closing of the transaction on December 16, 2013, and the second tranche of $10.0 million on June 16, 2014 . The Company used approximately $8.6 million of the proceeds from the first tranche to repay its obligations under the prior Loan and Security Agreement with the Lenders. The Company recorded the new debt at an estimated fair value of $24.9 million as of December 31, 2014. In connection with the Original Loan Agreement, the Company issued to the Lenders warrants exercisable for an aggregate of 176,730 shares of common stock at an exercise price of $6.79 per share. On September 24, 2014, the Company entered into Amendment No. 1 to the Original Loan Agreement with the Lenders. Amendment No. 1 extended the time period under which the Company could draw down the third tranche, of up to $15.0 million, from March 15, 2015 to August 1, 2015, subject to the Company obtaining approval for ZALVISO from the FDA. The Company did not receive FDA approval of ZALVISO by August 1, 2015 and as such, did not have access to the third tranche. On September 18, 2015, concurrently with the closing of the Royalty Monetization, the Company entered into a Consent and Amendment No. 2, or Amendment No. 2, to the Original Loan Agreement with the Lenders. Amendment No. 2 includes an interest-only period from October 1, 2015 through March 31, 2016, with further extension to September 30, 2016 upon satisfaction of certain conditions. These conditions were satisfied in the third quarter of 2015 and the interest-only period was extended through September 30, 2016. Loans under the Original Loan Agreement were scheduled to mature on October 1, 2017. In connection with Amendment No. 2, the Company reduced the exercise price of the previously issued warrants to $3.88 per share. On September 30, 2016, the Company entered into Amendment No. 3 to the Original Loan Agreement with the Lenders. Among other things, Amendment No. 3 extended the interest-only period from October 1, 2016 to April 1, 2017. In connection with Amendment No. 3, the Company further reduced the exercise price of the existing warrants held by the Lenders to $3.07 per share. On March 2, 2017, the Company amended and restated the Original Loan Agreement with the Lenders, which is referred to as the Amended Loan Agreement. Pursuant to the Amended Loan Agreement, the Company borrowed the first tranche of approximately $20.5 mill ion upon closing of the transaction on March 2, 2017, which is represented by secured term promissory notes, or the Notes. The Company used all of the proceeds from the first tranche to repay its obligations under the Original Loan Agreement (including a final payment of $1.7 million on the earliest of (i) October 1, 2017, ( ii) prepayment in full of the loans, other than by a refinancing with Hercules or (iii) the date on which the loans under the Amended Loan Agreement become due and payable). A second tranche, of up to $10.0 million, could be made upon the Lender’s investment committee approval and approval of the DSUVIA NDA by the FDA prior to December 31, 2017. The interest rate is calculated at a rate equal to the greater of either (i) 9.55% plus the prime rate as reported from time to time in The Wall Street Journal minus 3.50%, and (ii) 9.55%. Payments under the Amended Loan Agreement are interest-only until October 1, 2017 ( which will be extended until April 1, 2018 if the Company shall have received at least $40.0 million in net proceeds from out-licensing, commercial partnering relating to DSUVIA and ZALVISO, or from the issuance and sale of new equity, or a combination thereof, after March 2, 2017 and on or before December 31, 2017, or the Liquidity Milestone) followed by equal monthly payments of principal and interest through the scheduled maturity date on March 1, 2020 ( which would be extended until September 1, 2020 if the Company achieves the Liquidity Milestone) as applicable, or the Maturity Date. A final payment equal to 6.5% of the aggregate principal amount of loans funded under the Amended Loan Agreement, or End of Term Fee, or EOT Fee, will be due on the earliest of (i) the maturity date, (ii) prepayment in full of the loans (other than by a refinancing with Hercules) or (iii) the date on which the loans under the Amended Loan Agreement become due and payable. The Company’s obligations under the Amended Loan Agreement are secured by a security interest in substantially all of its assets, other than its intellectual property. If the Company prepays the loans under the Amended Loan Agreement prior to the maturity date, it will pay Hercules a prepayment charge, based on a percentage of the then outstanding principal balance, equal to 3% if the prepayment occurs prior to March 2, 2018, 2% if the prepayment occurs after March 2, 2018, but prior to March 2, 2019, or 1% if the prepayment occurs after March 2, 2019. The Amended Loan Agreement includes customary affirmative and restrictive covenants, but does not include any financial maintenance covenants, and also includes standard events of default, including payment defaults, breaches of covenants following any applicable cure period, a material impairment in the perfection or priority of Hercules’ security interest or in the value of the collateral, and events relating to bankruptcy or insolvency. Upon the occurrence of an event of default, a default interest rate of an additional 5% may be applied to the outstanding loan balances, and Hercules may declare all outstanding obligations immediately due and payable and take such other actions as set forth in the Amended Loan Agreement. Upon an event of default, including a change of control, Hercules has the option to accelerate repayment of the Amended Loan Agreement, including payment of any applicable prepayment charges. This option is considered a contingent put option liability, as the holder of the loan has the ability to exercise the option in the event of default, and is considered an embedded derivative, which must be valued and separately accounted for in the Company’s financial statements. As the Original Loan Agreement entered into on December 16, 2013 was considered an extinguishment, the contingent put option liability associated with the prior Loan and Security Agreement, which had an estimated fair value of $32 at the time of the amendment, was written off as a part of the loss on extinguishment, and a new contingent put option liability was established. As of September 30, 2017, the estimated fair value of the contingent put option liability was $0.2 million under the Amended Loan Agreement and as of December 31, 2016, the estimated fair value of the contingent put option liability was $0.1 million under the Original Loan Agreement. The estimated fair values were determined by using a risk-neutral valuation model, wherein the fair value of the underlying debt facility is estimated both with and without the presence of the default provisions, holding all other assumptions constant. The resulting difference between the two estimated fair values is the estimated fair value of the default provisions, or the contingent put option. The fair value of the underlying debt facility is estimated by calculating the expected cash flows in consideration of an estimated probability of default and expected recovery rate in default, and discounting such cash flows back to the reporting date using a risk-free rate. The contingent put option liability related to the Amended Loan Agreement will be revalued at the end of each reporting period and any change in the fair value will be recognized in interest income and other income (expense), net in the condensed consolidated statements of comprehensive loss. The Company performed an analysis of Amendments No. 2 and No. 3 to determine if each amendment was a modification or extinguishment of the debt under the Original Loan Agreement. The Company assumed immediate prepayment of both the pre-modification debt and post-modification debt, including the change in the fair value due to the warrant amendments, and concluded that Amendments No. 2 and No. 3 were each modifications rather than extinguishments of the debt. In connection with the Amended Loan Agreement, the Company performed an analysis to determine if the amendment and restatement of the Original Loan Agreement was a modification or extinguishment of the debt. The Company assumed immediate prepayment of both the pre-modification debt and post-modification debt and concluded the Amended Loan Agreement was a modification rather than extinguishment of the debt under the Original Loan Agreement. The accrued balance due under the Amended Loan Agreement was $22.4 million at September 30, 2017 and the accrued balance due under the Original Loan Agreement was $21.5 million at December 31, 2016, each of which includes the accrual portion of the EOT Fee and the $1.7 million final payment made on October 1, 2017, as applicable. Interest expense related to the Amended Loan Agreement was $0.9 million, $0.4 million of which represented amortization of the debt discount, for the three months ended September 30, 2017 and $2.6 million, $1.1 million of which represented amortization of the debt discount, for the nine months ended September 30, 2017. Interest expense related to the Original Loan Agreement was $0.7 million, $0.2 million of which represented amortization of the debt discount, for the three months ended September 30, 2016, and $2.1 million, $0.7 million of which represented amortization of the debt discount, for the nine months ended September 30, 2016.

Note 7 - Liability Related to Sale of Future Royalties

9 Months Ended

Sep. 30, 2017

. Liability Related to Sale of Future Royalties

September 18, 2015,

the Company consummated the Royalty Monetization, in which it sold certain royalty and milestone payment rights to ARPI LLC pursuant to a Purchase and Sale Agreement, or PSA. Subsequently, ARPI LLC sold the royalty and milestone payment rights to PDL for an upfront cash purchase price of

$65.0

million, subject to a capped amount of

$195.0

million pursuant to the Subsequent Purchase and Sale Agreement, or SPSA. Under the SPSA, PDL will receive

75%

of the European royalties under the Amended License Agreement as well as

80%

of the

first

four

commercial milestones, worth

$35.6

million (or

80%

$44.5

million), subject to the capped amount. The Company is entitled to receive

25%

of the royalties,

20%

of the

first

four

commercial milestones,

100%

of the remaining commercial milestones and all remaining development milestones of

$28.5

million.

The Company has significant continuing involvement in the Royalty Monetization primarily due to an obligation to act as the intermediary for the supply of

ZALVISO to

Grünenthal. Due to the Company’s significant continuing involvement, the Royalty Monetization has been accounted for as a liability that will be amortized using the interest method over the life of the arrangement. In order to determine the amortization of the liability, the Company is required to estimate the total amount of future royalty

and milestone payments to be received by PDL and payments the Company is required to make to PDL, up to a capped amount of

$195.0

million, over the life of the arrangement. The sum of the capped amount of

$195.0

million, less the

$61.2

million of net proceeds the Company received will be recorded as interest expense over the life of the liability. Consequently, the Company imputes interest on the unamortized portion of the liability and records interest expense. The Company’s estimate of the interest rate under the arrangement is based on the amount of royalty and milestone payments expected to be received by PDL over the life of the arrangement. The Company’s estimate of this total interest expense resulted in an effective annual interest rate of approximately

14%.

The Company will periodically assess the expected royalty and milestone payments using a combination of historical results, internal projections and forecasts from external sources. To the extent such payments are greater or less than our initial estimates or the timing of such payments is materially different than our original estimates, the Company will prospectively adjust the amortization of the liability and the interest rate.

The following table shows the activity within the liability account during the

nine

months ended

September 30, 2017 (

in thousands):

	Nine months ended September 30 , 2017			Period from inception to September 30 , 2017
Liability related to sale of future royalties — beginning balance	$	72,987		$	—
Proceeds from sale of future royalties		—			61,184
Non-cash royalty revenue		(89	)		(96	)
Non-cash interest expense recognized		7,935			19,745

Liability related to sale of future royalties as of September 30, 2017		80,833			80,833
Less: current portion		(471	)		(471	)
Liability related to sale of future royalties — net of current portion	$	80,362		$	80,362

Estimated non-cash royalty revenue of

$35

recognized in the

third

quarter of

2017

has

not

yet been remitted to

PDL and therefore is

not

included in the table above.

As royalties are remitted to PDL from ARPI LLC as described in Note

“Organization and Summary of Significant Accounting Policies,” the balance of the liability will be effectively repaid over the life of the agreement. The Company will record non-cash royalty revenues and non-cash interest expense within its condensed consolidated statements of comprehensive loss over the term of the Royalty Monetization.

Note 8 - Warrants	9 Months Ended
Note 8 - Warrants	Sep. 30, 2017
Notes to Financial Statements
Warrants Disclosure [Text Block]	8 . Warrants Hercules Warrants In connection with the Original Loan Agreement, executed in December 2013, the Company issued warrants to the Lenders which were exercisable for an aggregate of 176,730 shares of common stock with an exercise price of $6.79 per share, or the Warrants. In connection with Amendment No. 2 to the Original Loan Agreement, the Company reduced the exercise price of the warrants already held by the Lenders from the exercise price of $6.79 per share to $3.88 per share, or the First Warrant Amendments. In connection with Amendment No. 3 to the Original Loan Agreement, the Company further reduced the exercise price of the warrants already held by the Lenders to $3.07 per share, or the Second Warrant Amendments. Each Warrant may be exercised on a cashless basis. The Warrants are exercisable for a term beginning on the date of issuance and ending on the earlier to occur of five years from the date of issuance or the consummation of certain acquisitions of the Company as set forth in the Warrants. The number of shares for which the Warrants are exercisable and the associated exercise price are subject to certain proportional adjustments as set forth in the Warrants. The Company estimated the fair value of these Warrants as of the issuance date to be $1.1 million, which was used in the estimating the fair value of the amended debt instrument and was recorded as equity. The Company estimated the fair value of the warrants after modification by the First Warrant Amendments, as of the issuance date to be $0.1 million, which was used in estimating the fair value of the amended debt instrument in September 2015 and was recorded as equity. The Company estimated the fair value of the warrants after modification by the Second Warrant Amendments, as of the issuance date to be $45, and which was used in estimating the fair value of the amended debt instrument in September 2016 and was recorded as equity. As of September 30, 2017, the Lenders’ warrants had not been exercised. These warrants expire on December 15, 2018. 2012 Private Placement Warrants In connection with a private placement completed in June 2012, the Company issued PIPE warrants to purchase up to 2,630,103 shares of common stock. The per share exercise price of the PIPE warrants was $3.40. Under the terms of the PIPE warrants, upon certain transactions, including a merger, tender offer, sale of all or substantially all of the assets of the Company or if a person or group shall become the owner of 50% of the Company’s issued and outstanding common stock, which is outside of the Company’s control, each PIPE warrant holder may elect to receive a cash payment in exchange for the warrant, in an amount determined by application of the Black-Scholes option-pricing model. Accordingly, the PIPE warrants were recorded as a liability at fair value, as determined by the Black-Scholes option-pricing model, and then marked to fair value each reporting period, with changes in estimated fair value recorded through the condensed consolidated statements of comprehensive loss in interest income and other income (expense), net. The Black-Scholes assumptions used to value the PIPE warrants are disclosed in Note 2 “Investments and Fair Value Measurement.” Upon execution of the Purchase Agreement, the fair value of the PIPE warrants was estimated to be $5.8 million, which was recorded as a liability. As of September 30, 2017, the fair value of the PIPE warrants was estimated to be $0.6 million. The change in fair value during the three months ended September 30, 2017 and 2016, which was recorded as other expense, was $0.6 million, and $0.4 million, respectively. The change in fair value for the nine months ended September 30, 2017, which was recorded as other expense was $0.3 million, and the change in fair value for the nine months ended September 30, 2016, which was recorded as other income was $0.1 million. As of September 30, 2017, PIPE warrants to purchase 512,456 shares of common stock had not been exercised and were outstanding. These warrants expire on November 30, 2017.

Note 9 - Commitments and Contingencies	9 Months Ended
Note 9 - Commitments and Contingencies	Sep. 30, 2017
Notes to Financial Statements
Commitments and Contingencies Disclosure [Text Block]	9. Commitments and Contingencies Operating Leases On June 14, 2017, the Company entered into a second amendment, or the Second Lease Amendment, to that certain lease dated December 21, 2011, as amended by a first amendment, dated as of May 2, 2014, or the Existing Lease, and as amended by the Second Lease Amendment, the Lease, with Metropolitan Life Insurance Company, or the Landlord, for the Company’s current principal executive offices, approximately 26 square feet located at 301 – 351 Galveston Drive, Redwood City, California. Pursuant to the Second Lease Amendment, the term of the Existing Lease has been extended for a period of seventy-two ( 72 ) months, or the Extended Term, beginning February 1, 2018 and expiring January 31, 2024, or the Expiration Date, unless sooner terminated pursuant to the terms of the Lease. Pursuant to the Lease Amendment, the Company will pay on a monthly basis annual rent of approximately $1.2 million, with annual increases each 12 -month period beginning February 1 st , and the first two months to be abated provided that the Company is not in default thereunder. In addition, the Company will pay the Landlord specified percentages of certain operating expenses related to the leased facility incurred by the Landlord.

Note 10 - Stockholders' Equity	9 Months Ended
Note 10 - Stockholders' Equity	Sep. 30, 2017
Notes to Financial Statements
Stockholders' Equity Note Disclosure [Text Block]	10. Stockholders ’ Equity Common Stock 2016 ATM Agreement During the three and nine months ended September 30, 2017, the Company issued and sold 4.2 million shares of common stock pursuant to the 2016 ATM Agreement, for which the Company received net proceeds of approximately $13.1 million, after deducting commissions, fees and expenses of $0.3 million.

Note 11 - Stock-based Compensation

9 Months Ended

Sep. 30, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

. Stock-Based Compensation

The Company recorded total stock-based compensation expense for stock options, stock awards and the

2011

Employee Stock Purchase Plan, or ESPP, as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Cost of goods sold	$	80	$	77	$	243	$	225
Research and development		458		560		1,442		1,746
General and administrative		480		441		1,555		1,437

Total	$	1,018	$	1,078	$	3,240	$	3,408

As of

September 30, 2017,

there were

2,319,048

shares available for grant,

8,552,542

options outstanding and

restricted stock units outstanding under the Company’s

2011

Equity Incentive Plan and

1,041,249

shares available for grant under the ESPP.

Note 12 - Net Loss Per Share of Common Stock

9 Months Ended

Sep. 30, 2017

Earnings Per Share [Text Block]

. Net Loss per Share of Common Stock

The Company

’s basic net loss per share of common stock is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding for the period. The diluted net loss per share of common stock is computed by giving effect to all potential common stock equivalents outstanding for the period determined using the treasury stock method. For purposes of this calculation, options to purchase common stock and warrants to purchase common stock were considered to be common stock equivalents. In periods with a reported net loss, common stock equivalents are excluded from the calculation of diluted net loss per share of common stock if their effect is antidilutive.

During the

three

and

nine

months ended

September 30, 2017

and the

three

and

nine

months ended

September 30, 2016,

the exercise price of the PIPE warrants exceeded the average of AcelRx’s closing share price during each of the periods. As a result, the PIPE warrants were anti-dilutive during the

three

and

nine

months ended

September 30, 2017

and

2016,

respectively. The calculation of diluted net loss per share requires that, to the extent the average market price of the underlying shares for the reporting period exceeds the exercise price of the PIPE warrants and the presumed exercise of such securities are dilutive to loss per share for the period, adjustments to net loss used in the calculation are required to remove the change in fair value of the PIPE warrants for the period. Likewise, adjustments to the denominator are required to reflect the related dilutive shares. As the average market prices during the

three

and

nine

months ended

September 30, 2017

and

2016,

respectively, did

not

exceed the exercise price of the PIPE warrants,

such adjustments were made.

The following outstanding shares of common stock equivalents were excluded from the computation of diluted net loss

per share of common stock for the periods presented because including them would have been antidilutive:

	September 30 ,
	2017		2016
ESPP and stock options to purchase common stock		8,922,456		6,390,452
Convertible debt into common stock		—		553,763
Common stock warrants		689,186		692,611

Note 13 - Subsequent Event	9 Months Ended
Note 13 - Subsequent Event	Sep. 30, 2017
Notes to Financial Statements
Subsequent Events [Text Block]	13. Subsequent Event On October 12, 2017, the Company received a CRL from the FDA regarding its NDA for DSUVIA which states the FDA determined it cannot approve the NDA in its present form and provides recommendations for resubmission. The CRL contained two primary recommendations. First, while the safety database was suitable in number of patients, the collection of additional data was requested on at least 50 patients to assess the safety of DSUVIA dosed at the maximum amount described in the proposed labelling. Second, to ensure proper administration of the tablet with the single-dose applicator, the FDA recommended certain changes to the Directions for Use to address use-related errors, including dropped tablets, which changes would need to be validated through a Human Factors study. AcelRx has requested a Type A post-action meeting with the FDA to discuss the topics covered in the CRL and expects to confirm plans to move towards resubmission of the DSUVIA NDA.

Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2017

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

The

condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, ARPI LLC, which was formed in

September 2015

“Liability Related to Sale of Future Royalties” for additional information.

Reclassification, Policy [Policy Text Block]

Reclassifications

Certain prior year amounts in the

condensed consolidated financial statements have been reclassified to conform to the current year's presentation.

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

The accompanying unaudited condensed

not

Operating results

for the

nine

months ended

September 30, 2017,

are

not

necessarily indicative of the results that

may

be expected for the year ending

December

31,

2017.

The condensed consolidated balance sheet as of

December

31,

2016,

was derived from the Company’s audited financial statements as of

December

31,

2016,

included in the Company’s Annual Report on Form

-K filed with the SEC. These financial statements should be read in conjunction with the Company’s Annual Report on Form

-K for the year ended

December

31,

2016,

which includes a broader discussion of the Company’s business and the risks inherent therein.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

not

readily apparent from other sources. Actual results could differ from those estimates.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Adopted Accounting Standards

March 2016,

the FASB issued ASU

No.

2016

09,

Compensation - Stock Compensation (Topic

718

)

December 15, 2016,

with early adoption permitted. Under this guidance, on a prospective basis, companies will

January 1, 2017,

not

result in a net impact to retained earnings, and elected to recognize forfeitures when they occur using a modified retrospective approach, which did

not

have a material impact on its condensed consolidated financial statements.

July 2015,

the FASB issued ASU

No.

2015

11,

Inventory (Topic

330

) Related to Simplifying the Measurement of Inventory

which applies to all inventory measured using

first

-in,

first

No.

2015

was adopted by the Company beginning in fiscal

2017,

and did

not

have a material impact on its condensed consolidated financial statements.

Recently Issued Accounting Standards

May 2017,

the FASB issued ASU

2017

09,

Compensation - Stock Compensation (Topic

718

Scope of Modification Accounting

, to clarify which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting under ASC

718.

Under the new guidance, an entity will

not

apply modification accounting to a share-based payment award if all of the following remain unchanged immediately before and after the change of terms and conditions:

•

The award’s fair value (or calculated value or intrinsic value, if those measurement methods are used),

•

The award’s vesting conditions, and

•

The award’s classification as an equity or liability instrument.

ASU

2017

is effective for annual periods, and interim periods within those annual periods, beginning after

December 15, 2017

for all entities. Early adoption is permitted, including adoption in any interim period for which financial statements have

not

yet been issued or made available for issuance. The ASU will be applied prospectively to awards modified on or after the adoption date. The Company does

not

expect the adoption of ASU

2017

to have a material effect on its results of operations, financial condition or cash flows.

November 2016,

the FASB issued ASU

No.

2016

18,

Statement of Cash Flows (Topic

230

): Restricted Cash

. ASU

No.

2016

is effective retrospectively on

January 1, 2018,

with early adoption permitted. The Company does

not

expect the adoption of ASU

2016

to have a material effect on its results of operations, financial condition or cash flows.

August 2016,

the

FASB issued ASU

No.

2016

15,

Statement of Cash Flows (Topic

230

): Classification of Certain Cash Receipts and Cash Payments,

addressing

eight

specific cash flow issues in an effort to reduce diversity in practice. The amended guidance is effective for fiscal years beginning after

December 15, 2017,

and for interim periods within those years. Early adoption is permitted. The Company does

not

expect the amended guidance to have a material impact on its statements of cash flows.

February 2016,

the FASB issued ASU

No.

2016

02,

Leases (Topic

842

)

December 15, 2018,

with early adoption permitted. The Company has

not

yet selected a transition date, and is currently evaluating the impact of the adoption of this standard on its condensed consolidated financial statements.

May 2014,

the FASB issued ASU

No.

2014

09,

Revenue from Contracts with Customers

, to provide guidance on revenue recognition. ASU

No.

2014

may

August 2015,

the FASB issued ASU

No.

2015

14,

Revenue from Contracts with Customers (Topic

606

): Deferral of the Effective Date

, which provided for the adoption of the new standard for fiscal years beginning after

December 15, 2017.

Accordingly, ASU

No.

2014

is effective for the Company in the

first

quarter of

2018.

Early adoption up to the

first

quarter of

2017

is permitted. Upon adoption, ASU

No.

2014

No.

2014

and have the same effective date as the original standard:

	●	ASU No. 2016 - 08, Revenue from Contracts with Customers (Topic 606 ): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) ;
	●	ASU No. 2016 - 10, Identifying Performance Obligations and Licensing (Topic 606 );
	●	ASU No. 2016 - 11, Revenue Recognition (Topic 605 ) and Derivatives and Hedging (Topic 815 ): Rescission of SEC Guidance Because of Accounting Standards Updates 2014 - 09 and 2014 - 16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting;
	●	ASU No. 2016 - 12, Revenue from Contracts with Customers (Topic 606 ): Narrow-Scope Improvements and Practical Expedients ; and
	●	ASU No. 2016 - 20, Revenue from Contracts with Customers (Topic 606 ): Technical Corrections and Improvements .

The Company anticipates adoption of the new standard effective

January 1, 2018

under the modified retrospective transition

not

be material. As the Company completes its evaluation of the new standard, new information

may

impact its current conclusions, and will expand its analysis to include any new revenue arrangements initiated prior to adoption.

Note 2 - Investments and Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2017

Cash, Cash Equivalents and Investments [Table Text Block]

	As of September 30 , 201 7
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Cash and cash equivalents:
Cash	$	37,313	$	—	$	—	$	37,313
U.S. government agency securities		30,623		—		—		30,623

Total cash and cash equivalents		67,936		—		—		67,936

Total cash, cash equivalents and investments	$	67,936	$	—	$	—	$	67,936

	As of December 31, 201 6
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Cash and cash equivalents:
Cash	$	49,833	$	—	$	—	$	49,833
U.S. government agency securities		30,474		3		—		30,477

Total cash and cash equivalents		80,307		3		—		80,310

Total cash, cash equivalents and investments	$	80,307	$	3	$	—	$	80,310

Fair Value Measurements, Recurring and Nonrecurring [Table Text Block]

	As of September 30 , 201 7
	Fair Value		Level I		Level II		Level III
Assets
U.S. government agency obligations	$	30,623	$	—	$	30,623	$	—

Total assets measured at fair value	$	30,623	$	—	$	30,623	$	—

Liabilities
PIPE warrant s	$	640		—		—	$	640
Contingent put option liability		207		—		—		207

Total liabilities measured at fair value	$	847	$	—	$	—	$	847

	As of December 31, 201 6
	Fair Value		Level I		Level II		Level III
Assets
U.S. government agency obligations	$	30,477	$	—	$	30,477	$	—

Total assets measured at fair value	$	30,477	$	—	$	30,477	$	—

Liabilities
PIPE warrant s	$	288		—		—	$	288
Contingent put option liability		124		—		—		124

Total liabilities measured at fair value	$	412	$	—	$	—	$	412

Fair Value of Warrants [Table Text Block]

	As of September 30 , 2017			As of December 31, 2016
Market Price	$	4.60		$	2.60
Exercise Price	$	3.40		$	3.40
Risk-free interest rate		1.01	%		0.85	%
Expected volatility		57.0	%		81.0	%
Expected life (in years)		0.17			0.92
Expected dividend yield		0.0	%		0.0	%

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

	Three Months Ended September 30, 2017			Nine Months Ended September 30, 2017
Fair value —beginning of period	$	288		$	412
Change in fair value of PIPE warrants		612			352
Change in fair value of contingent put option associated with Original Loan Agreement with Hercules		(53	)		83

Fair value —end of period	$	847		$	847

	Three Months Ended September 30, 2016		Nine Months Ended September 30, 2016
Fair value —beginning of period	$	605	$	1,179
Change in fair value of PIPE warrants		392		(81	)
Change in fair value of contingent put option associated with Original Loan Agreement with Hercules		10		(91	)

Fair value —end of period	$	1,007	$	1,007

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details

Note 3 - Inventories (Tables)

9 Months Ended

Sep. 30, 2017

Schedule of Inventory, Current [Table Text Block]

	Balance as of
	September 30 , 201 7		December 31, 201 6
Raw materials	$	812	$	1,126
Work-in-process		157		296
Finished goods		—		732
Total	$	969	$	2,154

Note 5 - Collaboration Agreement (Tables)

9 Months Ended

Sep. 30, 2017

Revenue Recognition Amended Agreements [Table Text Block]

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Product sales	$	1,110	$	1,369	$	6,024	$	4,329
Joint steering committee, research and development services and demonstration devices		11		189		255		336
Non-cash royalty revenue related to Royalty Monetization (See Note 7)		78		3		124		3
Royalty revenue		26		1		41		1
Total	$	1,225	$	1,562	$	6,444	$	4,669

Note 7 - Liability Related to Sale of Future Royalties (Tables)

9 Months Ended

Sep. 30, 2017

Other Liabilities [Table Text Block]

	Nine months ended September 30 , 2017			Period from inception to September 30 , 2017
Liability related to sale of future royalties — beginning balance	$	72,987		$	—
Proceeds from sale of future royalties		—			61,184
Non-cash royalty revenue		(89	)		(96	)
Non-cash interest expense recognized		7,935			19,745

Liability related to sale of future royalties as of September 30, 2017		80,833			80,833
Less: current portion		(471	)		(471	)
Liability related to sale of future royalties — net of current portion	$	80,362		$	80,362

Note 11 - Stock-based Compensation (Tables)

9 Months Ended

Sep. 30, 2017

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Cost of goods sold	$	80	$	77	$	243	$	225
Research and development		458		560		1,442		1,746
General and administrative		480		441		1,555		1,437

Total	$	1,018	$	1,078	$	3,240	$	3,408

Note 12 - Net Loss Per Share of Common Stock (Tables)

9 Months Ended

Sep. 30, 2017

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	September 30 ,
	2017		2016
ESPP and stock options to purchase common stock		8,922,456		6,390,452
Convertible debt into common stock		—		553,763
Common stock warrants		689,186		692,611

Note 2 - Investments and Fair Value Measurement (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Available-for-sale Securities, Gross, Unrealized Gain (Loss) Accumulated In Investments	$ 0		$ 0		$ 0
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities			0		$ 0
Available-for-sale Securities, Gross Realized Gain (Loss)	0	$ 0	0	$ 0
Other Comprehensive Income (Loss), Transfers from Held-to-maturity to Available-for-Sale Securities, Net of Tax	$ 0	$ 0	$ 0	$ 0

Note 2 - Investments and Fair Value Measurement - Summary of Cash, Cash Equivalents and Investments (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Amortized Cost	$ 67,936	$ 80,307
Gross Unrealized Gains		3
Gross Unrealized Losses
Fair Value	67,936	80,310
Cash and Cash Equivalents [Member]
Amortized Cost	67,936	80,307
Gross Unrealized Gains		3
Gross Unrealized Losses
Fair Value	67,936	80,310
Cash and Cash Equivalents [Member] \| Cash [Member]
Amortized Cost	37,313	49,833
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value	37,313	49,833
Cash and Cash Equivalents [Member] \| U.S. Government Agency Securities [Member]
Amortized Cost	30,623	30,474
Gross Unrealized Gains		3
Gross Unrealized Losses
Fair Value	$ 30,623	$ 30,477

Note 2 - Investments and Fair Value Measurement - Fair Value of Financial Assets and Liabilities by Level Within Fair Value Hierarchy (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Assets, fair value	$ 30,623	$ 30,477
Liabilities, fair value	847	412
PIPE Warrants [Member]
Liabilities, fair value	640	288
Contingent Put Option Liability [Member]
Liabilities, fair value	207	124
Fair Value, Inputs, Level 1 [Member]
Assets, fair value
Liabilities, fair value
Fair Value, Inputs, Level 1 [Member] \| PIPE Warrants [Member]
Liabilities, fair value
Fair Value, Inputs, Level 1 [Member] \| Contingent Put Option Liability [Member]
Liabilities, fair value
Fair Value, Inputs, Level 2 [Member]
Assets, fair value	30,623	30,477
Liabilities, fair value
Fair Value, Inputs, Level 2 [Member] \| PIPE Warrants [Member]
Liabilities, fair value
Fair Value, Inputs, Level 2 [Member] \| Contingent Put Option Liability [Member]
Liabilities, fair value
Fair Value, Inputs, Level 3 [Member]
Assets, fair value
Liabilities, fair value	847	412
Fair Value, Inputs, Level 3 [Member] \| PIPE Warrants [Member]
Liabilities, fair value	640	288
Fair Value, Inputs, Level 3 [Member] \| Contingent Put Option Liability [Member]
Liabilities, fair value	207	124
U.S. Government Agency Obligations [Member]
Assets, fair value	30,623	30,477
U.S. Government Agency Obligations [Member] \| Fair Value, Inputs, Level 1 [Member]
Assets, fair value
U.S. Government Agency Obligations [Member] \| Fair Value, Inputs, Level 2 [Member]
Assets, fair value	30,623	30,477
U.S. Government Agency Obligations [Member] \| Fair Value, Inputs, Level 3 [Member]
Assets, fair value

Note 2 - Investments and Fair Value Measurement - Assumptions Used in Black-scholes Option Pricing Model to Estimate Fair Value of Pipe Warrants (Details) - PIPE Warrants [Member] - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Market Price (in dollars per share)	$ 4.60	$ 2.60
Exercise Price (in dollars per share)	$ 3.40	$ 3.40
Risk-free interest rate	1.01%	0.85%
Expected volatility	57.00%	81.00%
Expected life (in years) (Year)	62 days	335 days
Expected dividend yield	0.00%	0.00%

Note 2 - Investments and Fair Value Measurement - Summary of Changes in Fair Value of Level III Financial Liabilities (Details) - Fair Value, Inputs, Level 3 [Member] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Fair value—beginning of period	$ 288	$ 605	$ 412	$ 1,179
Change in fair value of PIPE warrants	612	392	352	(81)
Fair value—end of period	847	1,007	847	1,007
Hercules 2011 Loan and Security Agreement [Member]
Change in fair value of contingent put option associated with Original Loan Agreement with Hercules	$ (53)	$ 10	$ 83	$ (91)

Note 3 - Inventories (Details Textual) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Inventory Write-down	$ 369
ZALVISO [Member]
Inventory Write-down	$ 400

Note 3 - Inventories - Inventory Components (Details) - USD ($)
$ in Thousands

Sep. 30, 2017

Dec. 31, 2016

Raw materials

$ 812

$ 1,126

Work-in-process

157

296

Finished goods

732

Total

$ 969

$ 2,154

^[1]

[1]	The condensed consolidated balance sheet as of December 31, 2016 has been derived from the audited financial statements as of that date included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016.

Note 4 - U.S. Department of Defense Contract (Details Textual) - USD ($) $ in Thousands			3 Months Ended		9 Months Ended
	Mar. 09, 2017	Mar. 02, 2016	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	May 11, 2015
Government Contract Receivable							$ 17,000
Contracts Revenue			$ 262	$ 1,804	$ 811	$ 6,253
Government [Member]
Award Contract Renewal Term	330 days	120 days
Government [Member] \| Contract and Other Revenue [Member]
Contracts Revenue			$ 300	$ 1,800	$ 800	$ 6,200

Note 5 - Collaboration Agreement (Details Textual) - USD ($)
$ in Thousands

1 Months Ended

3 Months Ended

9 Months Ended

19 Months Ended

Jul. 17, 2015

Feb. 29, 2016

Sep. 30, 2015

Jul. 31, 2014

Dec. 31, 2013

Sep. 30, 2014

Sep. 30, 2017

Jul. 17, 2015

Jul. 16, 2015

Dec. 31, 2016

^[1]

Payments in Exchange for Services Under Collaboration Agreement

$ 700

Amount of Binding Product Forecast Revenue

3,700

Revenue Recognition, Milestone Method, Revenue Recognized

$ 15,000

$ 30,000

$ 5,000

$ 33,300

Revenue Recognition Milestone Method Agreed, Additional Amount, Based On Efforts And Targets

$ 194,500

194,500

Manufacturing Agreement, Percentage for Five Years

100.00%

Manufacturing Agreement, Percentage, Thereafter

80.00%

Revenue Recognition Milestone Method Agreed, Additional Amount

$ 15,000

Deferred Revenue

$ 54,400

54,400

$ 1,700

Collaboration Agreement Consideration, Amount

35,000

Discount on Manufacturing Services

$ 4,400

Committee Participation Sercices Recognized

200

Manufacturing Services Revenues Related to Binding Forecast

2,300

Deferred Revenue, Current

$ 362

Deferred Revenue, Noncurrent

3,553

$ 3,824

AUSTRALIA

Revenue Recognition, Milestone Method, Revenue Recognized

$ 166,000

ZALVISO [Member]

Revenue Recognition, Milestone Method, Revenue Recognized

28,500

Milestone Payments Received

$ 5,000

ZALVISO [Member] | Europe [Member]

Revenue Recognition, Milestone Method, Revenue Recognized

20,000

Based upon Net Sales Target Achievements [Member]

Increase (Decrease) in Milestone Payments Related to Net Sales Target

(5,500)

Potential Milestone Payments Related to Net Sales Target

166,000

$ 171,500

Revenue Recognition Milestone Method Agreed, Additional Amount, Based On Efforts And Targets

166,000

Based upon Successful Regulatory and Product Development Efforts [Member]

Revenue Recognition Milestone Method Agreed, Additional Amount, Based On Efforts And Targets

28,500

Previously Delivered License [Member]

Revenue Recognition Milestone Method Agreed, Additional Amount

13,200

Research and Development and Committee Participation Services [Member]

Revenue Recognition Milestone Method Agreed, Additional Amount

$ 500

[1]	The condensed consolidated balance sheet as of December 31, 2016 has been derived from the audited financial statements as of that date included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016.

Note 5 - Collaboration Agreement - Summary of Revenue Recognized Under the Amended Agreements (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		24 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017
Non-cash royalty revenue related to Royalty Monetization (See Note 7)			$ 89	$ 3	$ 96
Royalty revenue	$ 35
Collaboration agreement	1,225	$ 1,562	6,444	4,669
Collaborative Arrangement [Member]
Revenue Recognized	11	189	255	336
Non-cash royalty revenue related to Royalty Monetization (See Note 7)	78	3	124	3
Royalty revenue	26	1	41	1
Collaboration agreement	1,225	1,562	6,444	4,669
Collaborative Arrangement [Member] \| ZALVISO [Member] \| Grunenthal [Member]
Revenue Recognized	$ 1,110	$ 1,369	$ 6,024	$ 4,329

Note 6 - Long-term Debt (Details Textual)
$ / shares in Units, $ in Thousands

1 Months Ended

3 Months Ended

9 Months Ended

12 Months Ended

Oct. 01, 2017

USD ($)

Mar. 02, 2017

USD ($)

Dec. 16, 2013

USD ($)

$ / shares

Sep. 30, 2016

$ / shares

Dec. 31, 2013

$ / shares

Dec. 31, 2011

USD ($)

Jun. 30, 2011

$ / shares

Sep. 30, 2017

USD ($)

Sep. 30, 2016

USD ($)

$ / shares

Sep. 30, 2017

USD ($)

Sep. 30, 2016

USD ($)

$ / shares

Mar. 01, 2020

Mar. 01, 2019

Mar. 01, 2018

Dec. 31, 2016

USD ($)

Sep. 18, 2015

$ / shares

Sep. 17, 2015

$ / shares

Dec. 31, 2014

USD ($)

Sep. 24, 2014

USD ($)

Jun. 16, 2014

USD ($)

Jun. 29, 2011

USD ($)

Fair Value of Contingent Put Option, Liability

$ 207

$ 124

^[1]

Interest Expense

919

$ 702

2,596

$ 2,069

Amortization of Debt Discount (Premium)

1,060

$ 653

Hercules Warrants [Member]

Warrant Exercisable Term

5 years

Debt Conversion, Converted Instrument, Warrants or Options Issued | shares

274,508

Investment Warrants, Exercise Price | $ / shares

$ 3.07

$ 6.79

$ 3.06

Common Stock Warrants Exercised | shares

176,730

Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares

$ 6.79

$ 3.07

$ 3.88

$ 6.79

Hercules Loan and Security Agreement [Member]

Number of Tranches for Loan and Security Agreement

$ 20,000

Debt Instrument, Interest Rate, Stated Percentage

8.50%

Additional Default Interest Rate

5.00%

Fair Value of Contingent Put Option, Liability

$ 32

200

100

Long-term Line of Credit

22,400

$ 21,500

Interest Expense

900

$ 700

2,600

$ 2,100

Amortization of Debt Discount (Premium)

$ 400

$ 200

$ 1,100

$ 700

Hercules Loan and Security Agreement [Member] | Subsequent Event [Member]

Repayments of Long-term Debt

$ 1,700

Hercules Loan and Security Agreement [Member] | Scenario, Forecast [Member]

Prepayment Charge of Term Loan Percentage

1.00%

2.00%

3.00%

Hercules Loan and Security Agreement [Member] | Hercules Warrants [Member]

Warrant Exercisable Term

7 years

Hercules Loan and Security Agreement [Member] | First Tranche [Member]

Hercules Loan and Security Agreement [Member] | Second Tranche [Member]

$ 10,000

Amended and Restated Loan and Security Agreement [Member]

$ 10,000

Number of Tranches for Loan and Security Agreement

Line of Credit Facility, Maximum Borrowing Capacity

$ 40,000

Debt Instrument, Fair Value Disclosure

$ 24,900

Long-term Debt Maturities Balloon Payments

$ 1,700

Debt Instrument, Variable Rate Threshold

9.55%

Debt Instrument, Percentage Used to Calculate Variable Rate

3.50%

Debt Instrument, Minimum Trigger Amount to Extend Period of Interest Only Payments

$ 40,000

Debt Instrument, Final Payment, Percentage of Aggregate Principal Amount

6.50%

Amended and Restated Loan and Security Agreement [Member] | First Tranche [Member]

Repayments of Long-term Debt

$ 20,500

15,000

$ 8,600

Amended and Restated Loan and Security Agreement [Member] | Second Tranche [Member]