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'Pleasantly Surprised' Acadia Analysts See Blockbuster Potential For Pimavanserin In Dementia Psychosis

'Pleasantly Surprised' Acadia Analysts See Blockbuster Potential For Pimavanserin In Dementia Psychosis

ACADIA Pharmaceuticals Inc. (NASDAQ: ACAD) shares, which rallied over 63% Monday following positive results from its pimavanserin in dementia-related psychosis, were seeing further upward momentum Tuesday. 

The Analysts

H.C. Wainwright & Co. analyst Andrew Fein reiterated a Buy rating on Acadia with a $60 price target.

Canaccord Genuity analyst Sumant Kulkarni upgraded the stock from Hold to Buy and raised the price target from $29 to $50.

HC Wainwright Remains Bullish On Fundamentals

Acadia delivered another pleasant surprise for investors by way of a positive interim analysis from the Phase 3 HARMONY study, which showed pimavanserin's statistically superior efficacy compared to placebo in time to relapse of dementia-related psychosis, Fein said in a Tuesday note.

Acadia's "pipeline in a drug" thesis is now validated with a much bigger population, the analyst said.

The analyst sees the dementia-related psychosis opportunity alone as sufficient to fuel pimavanserin growth in the foreseeable future.

The positive news came just after the company raised its guidance in the second quarter, Fein said. 

"Thus, we maintain our bullish view of Acadia's fundamentals." 

Given the $25,000 annual pricing, the peak sales of pimavanserin in dementia-related psychosis could be north of $2 billion, according to H.C. Wainwright. 

Canaccord Looks Ahead To FDA Meeting, Phase 3 Data 

The early stoppage of the study — which is based on hitting a relatively high bar of pre-specified stopping criteria that required a one-sided p-value of <0.0033 on the primary endpoint — was a pleasant surprise, Kulkarni said in a Tuesday note. 

The analyst sees more upside over Monday's strong gains, as dementia-related psychosis has no approved drugs, the analyst said. 

The indication is a bigger opportunity than Parkinson's disease psychosis, for which pimavanserin is currently approved as Nuplazid, he said. 

The next awaited event is Acadia's meeting with the FDA to discuss the sNDA, with the company planning a regulatory submission in 2020, Kulkarni said.

"To us, ACAD appears very confident that it has everything necessary to support potential approval." 

Canaccord now models an 80% probability of approval in 2021, a peak share of 6% in 2029 and peak unadjusted sales of $2.7 billion.

An upcoming catalyst is the top-line Phase 3 data for pimavanserin in negative symptoms of schizophrenia, which is due in 2019, the analyst said. 

"We view this highly challenging indication (no products approved) as a call option." 

The Price Action

Acadia Pharma shares were up 5.95% at $41.16 at the time of publication Tuesday. 

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Latest Ratings for ACAD

Sep 2019UpgradesMarket PerformOutperform
Sep 2019UpgradesHoldBuy
Sep 2019MaintainsBuy

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