Cory Kasimov Is Singing the Praises of ACADIA Pharmaceuticals Inc. (ACAD); Here’s Why

J.P. Morgan: After a beat and raise from the ACAD team in its 3Q, PDP drug Nuplazid's launch is going strong.


ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) shares may be falling 9% today, but the drug maker actually just flashed a solid third quarter outclass yesterday thanks to its champion asset Nuplazid, approved to treat hallucinations and delusions associated with psychosis experienced by some people with Parkinson’s disease, or PDP.

Not only did ACAD show off a beat that shows the Nuplazid launch is going strong, the drug maker’s management team boosted its revenue guide high over Street-wide expectations.

J.P. Morgan analyst Cory Kasimov takes this as a triumph for the bullish camp, reiterating an Overweight rating on ACADIA stock with a $50 price target, which represents a 69% increase from current levels. (To watch Kasimov’s track record, click here)

For the third quarter, ACAD posted ($0.53) in EPS, far better than both the analyst’s estimate of ($0.66) and consensus of ($0.64). Operating expenses of $101.9 million were less than the analyst had predicted with a forecast of $111.3 million. The ACAD management team meanwhile gave its revenue guide for the year a solid boost from a range of $105 to $115 million up to $124 to $127 million, which soared ahead of Bloomberg consensus of $111.5 million.

“Commentary on the launch continues to be positive as product awareness is building, and patient/physician experience is favorable. On the call, ACAD’s dementia-related psychosis (DRP) Phase 3 trial design was discussed following the recent presentation of Phase 2 ADP data at CTAD. Mgmt continues to be quite confident in the design and provided more details on the call. Bottom line, we continue to hold a favorable view of ACAD in light of Nuplazid’s encouraging performance to date and potential line extensions for this wholly owned CNS asset that may add to the company’s scarcity value.”

“Patient/physician experience remains positive as physician awareness continues to grow and caregiver/patients education is implemented,” the analyst writes, noting that the company still has plans to kick off a direct-to-consumer (DTC) campaign to garner Parkinson’s Disease Psychosis and Nuplazid awareness for patients while facilitating more conversation with doctors about the asset. Kasimov continues, “New CMS regulatory guidance (expected on 11/28), which recognizes PDP as a long-term disease, may also positively impact Nuplazid uptake.”

Closing the quarter with $366.6 million in cash, the analyst foresees a “sufficient” pathway into the “foreseeable future.”

Cory Kasimov’s bullish predictions are among good company, considering the biotech player’s favorability goes to the bulls, with TipRanks analytics exhibiting ACAD as a Strong Buy. Based on 7 analysts polled by TipRanks 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 75% upside from where the stock is currently trading.