2Q Snapshot: H.C. Wainwright Weighs In on ACADIA Pharmaceuticals Inc. (ACAD)

In ACADIA Pharmaceuticals Inc.’s (NASDAQ:ACAD) second-quarter report, investors got a first glimpse of Nuplazid’s early launch in Parkinson’s disease psychosis (PDP). ACAD reported EPS of $0.63, compared to consensus estimates of $0.49 and a net loss of $71.3MM. Nuplazid sales in 2Q16 were $0.1MM compared to consensus of $0.8MM.

H.C. Wainwright analyst Andrew Fein commented, “We guide investors’ attention away from revenue this quarter, that while de minimis, was in line with our expectations and, we believe, that of the Street more broadly. Instead, we draw attention to factors that have the potential to impact 3Q and 4Q, independent of NUPLAZID’s potential to be successful in the long-term, including the ongoing 30-day sampling program and the formulary lag. Firstly, significant polypharmacy is evident in the PDP population and we anticipate that physicians will likely titrate patients at half dose during first use thus, providing patients access to free drug for significantly longer than the 30-day period. Secondly, we anticipate that the lag period for NUPLAZID becoming available on formulary will further erode near-term revenue.”

“At this time, we remain confident in management’s efforts to support a successful launch of NUPLAZID, and based on our projections, we maintain our view that the PDP market is sufficient to support company valuation in the long-term. We remind investors that we value Acadia based only on the opportunity for PDP and do not believe value should be ascribed for NUPLAZID in ADP or ADA at this time,” the analyst concluded.

Fein reiterated a Buy rating on ACADIA shares with a price target of $60, which represents a potential upside of 66% 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 Andrew Fein has a yearly average return of 15.1% and a 51.1% success rate. Fein has a -3.3% average return when recommending ACAD, and is ranked #160 out of 4090 analysts.

Out of the 12 analysts polled by TipRanks, 9 rate ACADIA stock a Buy, while 3 rate the stock a Hold. With a return potential of 46%, the stock’s consensus target price stands at $52.50.

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