Acadia Shares Up Big On Strong Sales, Increased Confidence

ACADIA Pharmaceuticals Inc. ACAD shares hit a four-month high on Wednesday following the release of strong sales by the company.

HC Wainwright said underlying marketing dynamics give them confidence going forward. The firm reiterated its Buy rating and $60 price target.

Analysts Andrew Fein, Emile Yu and Jotin Marango noted Acadia reported strong Nuplazid sales of $26.9 million after a full year on-market, up from $15.2 million in the first quarter. The analysts indicated about 94 percent of lives with full Medicare and Commercial coverage and 25 percent of its business was from LTC, VA and TRICARE.

The analysts also pointed to additional detail from Nuplazid's first year, which supported continued growth trajectory for the rest of 2017. However, the analysts said questions were raised concerning the need to capture more treatment naïve patients, and the varied strategies needed to engage psychiatrists v. neurologists.

"We believe that, despite lingering questions, investors should draw comfort from the 1-year mark as a tipping point for informational value," HC Wainwright said. "Acadia now has, in our view, enough real-world data to assess trends and metrics for guiding Nuplazid's commercial efforts and helping to shape Street expectations."

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The firm also spoke of its survey of 100 physicians last July, which showed a larger market opportunity and more bullish physician attitude to prescribing Nuplazid than it had modeled at that time.

Overall, the firm remains optimistic on Nuplazid's revenue potential and believe the program carried long-term value both to investors, and potentially as an acquisition.

The firm also expressed encouragement at the update from Acadia on its end of Phase 2 meeting with the FDA on Pimavanserin. The update means a clearer path to registration and likely a quicker commencement of the pimavanserin Phase 3 program.

"We await additional detail on this trial program, and look forward to additional granularity on the Phase 2 data which will be presented at the CTAD annual meeting in Boston the first week of November," the firm added.

Reviewing the second quarter results, HC Wainwright noted the company reported net sales of $30.5 million, which includes a $3.5 million one-time adjustment. Weighed down by R&D expenses of $34.2 million and SG&A expenses of $34.2 million, the company reported a loss of 55 cents per share. The firm also noted that cash and equivalents at the end of the quarter stood at $417.3 million.