ACADIA Pharmaceuticals Inc.(NASDAQ: ACAD) stock rallied over 8.8% since the start of 2017 (as of 10:54 AM EST January 5th, 2017; Source: Google finance).
Nuplazid may change the game
ACADIA Pharmaceuticals Inc.(NASDAQ: ACAD) Nuplazid can be a game changer for the company. The company has released encouraging data from an important Phase II clinical trial which indicated that Nuplazid has shown statistically significant reduction in psychosis as measured by the Neuropsychiatric inventory- Nursing Home (NPI-NH) Psychosis score. The trial was designed to test Nuplazid as a hopeful treatment for Alzheimer’s disease psychosis. The FDA has not yet approved any drug to treat Alzheimer’s disease and American market is roughly about 5 million people. The wholesale price is $23500 per year, and Nuplazid is only FDA approved drug. Even capturing a small portion of the market would lead to revenue jump for the company. Furthermore, the off label usage of Nuplazid is becoming more prevalent and would increase throughout 2017 because of marginally effective ADP results and lack of options. Furthermore, Nuplazid is seeing some use for Lewy body dementia as an off label treatment.
Mixed Quarterly performance
For September quarter, the company reported net loss of $71.6 million or $0.61 per share. Cash balance was at $588 million. The quarter reported Nuplazid sales at $5.3 million much about the street expectations of $2.6 million. Further, the company has made lots of progress in expanding formulary access to the Nuplazid drug during the quarter. The management has stated that Nuplazid is now covered by nearly all Medicare plans and that commercial payers are rapidly expanding access.
Strong pipeline
The company has announced that its new phase 3 trial ENHANCE-1 trial kicked off during the month. The study is for enhanced use of Nuplazid as a potential adjunctive treatment in patients who have schizophrenia and are not adequately responding to their current antipsychotic therapy. The company has also initiated its phase 2 Advance study in evaluating Nuplazid as a potential adjunctive treatment in patients with negative symptoms of schizophrenia.
Outlook
In the September quarter, Nuplazid has earned $5.3 million and going forward market analyst expects Nuplazid to deliver $73.88 million in 2018. The market has dominated by off-labeldrug usage and therefore it is likely that 2017 may be a tough year for the company leaving its pressure on stock movement. But considering the potential American market, the drug would be a blockbuster post its wide acceptance. By covered by most of insurance plans, the drug has long potential to grow. ACADIA Pharmaceuticals Inc has consensus “ Strong Buy” rating with price target of $42 per share.