ACADIA Pharmaceuticals Inc. (ACAD) Gets a Price Target Jump; Here’s Why

One of Wall Street's best performing analysts sees strong long-term care growth for ACAD's Nuplazid.


ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) flashed a strong third quarter beat just last Tuesday, earning even more confidence from top analyst Ritu Baral at Cowen, who praises commercial execution from the ACAD team.

In reaction to a beat and raise for Parkinson’s disease psychosis (PDP) drug Nuplazid and with expectations for this “solid” commercial growth to surge ahead, the analyst reiterates an Outperform rating on ACAD stock while boosting the price target from $46 to $50, which implies a just under 75% increase from current levels.

For the third quarter, the drug maker’s lead asset earned $35.6 million in revenues, outclassing both the analyst’s forecast of $34.1 million and consensus of $32.0 million, marking a 17% quarter-over-quarter climb. The ACAD team boosted its revenue guide for the full year from a range of $105 to $115 million up to $124 to $127 million, which implies a fourth quarter revenue of $42.7 to $45.7 million. ACAD likewise sets expectations for R&D expenses to fall within the mid-$40 million range and SG&A expenses to fall within the mid-$60 to low $70 million range for the fourth quarter. At the close of its third quarter, the drug makers had $366.6 million in cash.

Baral highlights, “ACAD continues to note multiple positive commercial indicators, including increased percentage of physicians considering Nuplazid a first-line treatment for PDP and 25% Q/Q growth in the number of LTC pharmacies carrying Nuplazid. We see ACAD’s LTC marketing efforts as highly effective as evidenced by the continued contribution of the segment to the overall business: ACAD originally expected LTC to constitute 20% of revenues, whereas it now represents 30% (increased from 25% in 2Q17). ACAD will launch a single 34mg capsule in 2018. Given many physicians choose to titrate Nuplazid based on experience with other antipsychotics, we think this change will increase the average pills/day as well as compliance rates.”

Glancing down the line, the analyst concludes on a bullish note: “Management continues to execute on its commercial efforts and plans to roll out DTC ads in 4Q17. Next clinical data from ACAD will be from the Ph2 MDD trial in 2H18. We also note an ongoing Ph3 trial in DRP and Ph2 trials in schizophrenia.”

Ritu Baral has a very good TipRanks score with a 53% success rate and a high ranking of #74 out of 4,702 analysts. Baral realizes 24.2% in her annual returns. When recommending ACAD, Baral gains 0.2% in average profits on the stock.

Most on the Street back this top performing analyst’s praise for the biotech firm’s prospects, as TipRanks analytics demonstrate ACAD as a Strong Buy. Out of 7 analysts polled by TipRanks in the last 3 months, 6 are bullish on Acadia stock while 1 remains sidelined. With a return potential of nearly 85%, the stock’s consensus target price stands at $52.83, marking a nearly 85% upside from where the stock is currently trading.