Needham analyst Alan Carr weighs in on ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) after hosting a call last week with key opinion leader (KOL) Dr. Joseph Friedman of Brown University and Butler Hospital notoriety to chat regarding his experience with the firm’s pipeline drug Nuplazid, which was approved by the FDA in April to treat Parkinson’s Disease Psychosis (PDP). After the drug’s launch in May 2016, Dr. Friedman has since prescribed the drug to approximately 15 patients thus far.

When assessing initial responses from nine patients, feedback has demonstrated the drug has been “helpful” in treatment-naïve patients, with three out of four finding Nuplazid beneficial. However, the drug has not had results as stellar in patients who previously responded poorly to traditional antipsychotics, with 0 out of 5 indicating no benefit from Nuplazid to date.

In the call, Dr. Friedman expressed having seen no safety signals thus far, therefore feeling “no need to titrate drug and starts all patients at recommended BID dose.”

Overall, Carr notes, “Dr. Friedman has been impressed with safety and tolerability profile and plans to use the drug as front-line therapy. Because onset of action is relatively slow (3-6wks), he plans to continue to use quetiapine or clozapine in pts who need psychosis symptoms addressed immediately. There have been no major hurdles with payer coverage.”

Additionally, Nuplazid’s Phase 2 trial results evaluating its impact on treating Alzheimer’s Disease Psychosis (ADP) are expected by the fourth quarter of this year. “Dr. Friedman does not treat ADP pts, however, he does not expect a positive outcome due in part to complicated nature of Alzheimer’s dementia. He noted that no other antipsychotics have been helpful in treating ADP,” the analyst adds.

Looking ahead, Carr anticipates Nuplazid to “ultimately have utility in other psychiatric indications,” even if his current estimates mainly and “conservatively” model the drug’s use in PDP.

“We believe expansion to other indications would have a substantial impact on peak sales potential,” Carr concludes.

As such, the analyst reiterates a Buy rating on ACAD with a price target of $49, which represents a 107% increase from where the shares last closed.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, five-star analyst Alan Carr is ranked #364 out of 4,190 analysts. Carr has a 44% success rate and earns 7.7% in his yearly returns. When recommending ACAD, Carr gains 23.2% in average profits on the stock.

TipRanks analytics indicate ACAD as a Buy. Based on 10 analysts polled in the last 3 months, 70% rate a Buy on ACAD, while 30% maintain a Hold. The consensus price target stands at $43.22, marking an 81% upside from where the stock is currently trading.