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UPDATE: Needham & Company Upgrades Acadia Pharmaceuticals (ACAD) to Buy, $9 Price Target

November 27, 2012 11:54 AM EST Send to a Friend
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Price: $23.98 +1.57%

Rating Summary:
    8 Buy, 1 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 3 | Down: 4 | New: 7
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(Updated - November 27, 2012 12:32 PM EST)

Intra-day, Needham & Company upgraded Acadia Pharmaceuticals (NASDAQ: ACAD) from Hold to Buy with a price target of $9, following successful top-line results from its pivotal Phase III trial evaluating the efficacy, tolerability and safety of pimavanserin in patients with Parkinson’s disease psychosis.

"The consistency of effect across all secondary and exploratory measures (caregiver burden, sleep, clinical global improvement) provides further evidence of a clinically meaningful impact," Needham & Company analyst Alan Carr said.

While they were previously concern that changes to trial design relative to the previous two failed Phase 3 trials in PDP may not have been sufficient for a positive outcome, study 020 success "is a clear indicator that these changes were adequate."

Carr believes PDP represents an attractive commercial opportunity for a company with a small sales force. "Notably, however, Acadia has also previously shown utility of pimavanserin in schizophrenia in a Phase 2 trial. We believe the market potential in PDP may be ~$500M and over $1B in schizophrenia. Acadia may also explore efficacy in Alzheimer’s disease psychosis."

The firm conservatively assume another 2 years to conduct Study 021, which would allow for a commercial launch in 2016. Study 021 may enroll more quickly than Study 020.

"Pimavanserin may be helpful in both early and late stages of PDP according to S. Isaacson, an investigator in the Phase 3 trial," the analyst also notes. "Dopamine replacement, the standard treatment for PD, must often be reduced to mitigate PDP. Pimavanserin appears well-positioned to allow physicians to continue to treat patients with dopamine replacement such that both PD and PDP symptoms can be controlled."

For an analyst ratings summary and ratings history on Acadia Pharmaceuticals click here. For more ratings news on Acadia Pharmaceuticals click here.

Shares of Acadia Pharmaceuticals are up 141 percent mid-day.




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