ACADIA Pharmaceuticals Inc.’s (ACAD) Phase II Study in Alzheimer’s Disease Psychosis Faces Criticism; Top Analyst Weighs In


Shares of ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) tumbled nearly 9% in Monday’s trading session, after the drug maker announced the presentation of data from the Phase II -019 Study of pimavanserin in Alzheimer’s disease psychosis (ADP) at the 10th Clinical Trials on Alzheimer’s Disease (CTAD) meeting in Boston.

Unfortunately, pimavanserin failed to statistically separate from placebo on key secondary endpoints measured by two scales: ADCS-CGIC and CMAI-SF and on the exploratory endpoints of change of NPI-NH Psychosis score at week 12 or a scale measuring daily activities called ADCS-ADL.

Cowen’s top analyst Ritu Baral commented, “The major criticism of the ADP data to date have been the lack of statistical significance vs. placebo on improvement of psychosis at 12 weeks (following significance at 6 weeks). KOLs suggested the lack of significance was due in part to the relapsing-remitting nature of dementia-related psychoses and noted 70% of patients spontaneously remit over 12 weeks, though 50% of them will relapse over the subsequent year. The KOLs indicated the relapsingremitting course of psychosis may be different for Lewy Body-related dementias vs. AD, though there have not been substantial longitudinal studies to specifically characterize them. However, the KOLs noted they believe the 6-month primary endpoint would be sufficient to control for potential spontaneous relapses.”

The analyst concluded, “Feedback at CTAD as well as our recent KOL discussions have been highly supportive of the use of the randomized withdrawal design of the Ph3 HARMONY trial. In particular, KOLs have indicated the enrichment strategy has historically had high rates of success in psychiatry trials and would likely incentivize faster patient enrollment, as a primary deterrent for dementia patients and caregivers in enrolling in clinical trials is the potential to be initially randomized to placebo.”

As such, Baral reiterates an Outperform rating on ACADIA shares, with a price target of $46, which represents a potential upside of 41% from where the stock is currently trading.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Ritu Baral has a yearly average return of 23.6% and a 52% success rate. Baral has a 10.1% average return when recommending ACAD, and is ranked #76 out of 4703 analysts.

Most analysts on Wall Streets are out rooting for this biotech firm to be a winning stock pick, as TipRanks analytics showcase ACAD as a Strong Buy. Based on 7 analysts polled in the last 3 months, 6 rate a Buy on ACADIA stock while 1 maintains a Hold. The 12-month average price target stands at $52.60, marking a nearly 62% upside from where the stock is currently trading.