ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) is anticipated to announce data from the Phase 2 trial of pimavanserin in Alzheimer’s Disease Psychosis (ADP) come December. Both the Street and Cowen analyst Ritu Baral are modeling low expectations for the trial’s chance of success, with the analyst projecting less than 25% odds of the firm’s pipeline drug reaching statistical significance on the primary endpoint.
However, “Despite our view of low odds of trial success, we do note some potential readthrough from secondary endpoint on other potential clinical benefit,” Baral notes.
Moreover, Baral continues that there could still be a meaningful result waiting, explaining, “While management has guided low expectations on the overall success of the trial, they appear to believe the data may show signals of benefit with secondary analysis suggesting patient subpopulations and/or certain symptomatology could show particular benefit.”
Therefore, the analyst reiterates an Outperform rating on shares of ACAD with a $42 price target, which represents a just under 52% increase from where the stock is currently trading.
“Given we believe the market has <20% chance of the ADP success baked in already, we see very little downside in Ph2 failure, even with potential ‘clean’ failures described in the categories above. Should announced data fail, we anticipate ACAD would trade down transiently ~$5m. Should Ph2 data be positive to ACAD’s threshold, the shares may rise >50% or more given the much larger size of the ADP market vs. PDP,” Baral concludes.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, four-star analyst Ritu Baral is ranked #976 out of 4,241 analysts. Baral has a 36% success rate and gains 3.1% in her yearly returns. However, when recommending ACAD, Baral loses 9.0% in average profits on the stock.
TipRanks analytics demonstrate ACAD as a Strong Buy. Out of 9 analysts polled in the last 3 months, 7 are bullish on ACAD stock and 2 remain sidelined. With a return potential of nearly 51%, the stock’s consensus target price stands at $41.63.