Acadia Pharmaceuticals Inc. shares fell 10.7% in morning trading on Thursday after the company announced its Phase 2 RADIANT study for remlifanserin failed to meet its primary endpoint.

The drug, designed to treat hallucinations and delusions in patients with Alzheimer's disease psychosis, showed a change of -12.6 compared to -10.4 for placebo at week 6 on the primary SAPS-H+D scale when administered at 60 mg once daily. The result produced a p-value of 0.0603, slightly above the 0.05 threshold needed for statistical significance.

The key secondary endpoint, the CGI-S-ADP severity scale, reached nominal significance with a p-value of 0.0077.

Acadia said it will remove the 30 mg dose arm from its ongoing Phase 3 program after that dose showed minimal improvement over placebo.

Oppenheimer analysts, who maintain a Perform rating with a $25 price target on the stock, had previously estimated about 20% downside risk if the trial results disappointed.