In a research report released today, Roth Capital analyst Michael Higgins resumed coverage on ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) with a Neutral rating on ACAD with a price target of $25, which represents just under a 6% increase from where the shares last closed.
As the biotech firm launches its pipeline drug Nuplazid (pimavanserin), the first product to treat the symptoms of Parkinson’s disease psychosis (PDP), Higgins believes the risks present “suggest caution is warranted” and therefore remains sidelined amid the launch.
The analyst opines, “We find it is too early to recommend the shares, given the risk of the launch is tilted away from consensus estimates and the potential for post-approval serious adverse events and mortality risk.”
This quarter, Higgins looks to forthcoming results from Nuplazid’s proof-of-concept Phase 2 in treating Alzheimer’s disease psychosis (ADP).
Nuplazid has been well-accepted thus far among Parkinson’s key opinion leaders (KOLs). However, the analyst notes, “We believe we’ll find strong adoption among physicians in the PDP patients with more severe disease, but Nuplazid may plateau sooner than expected given its efficacy in those with a less severe degree of PDP.”
Ultimately, “While we agree there is a medical need for Nuplazid, we find there is too much risk for post-approval SAEs and mortality to recommend shareholders buy ACAD shares at this time. Furthermore, we find consensus revenue projections are ahead of our expectations, including the next two quarters and ACAD shares may fall if the launch is slower than expected,” Higgins concludes.
As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks, analyst Michael Higgins is ranked #3,930 out of 4,180 analysts. Higgins has a 41% success rate and faces a loss of 10.6% in his yearly returns.
TipRanks analytics demonstrate ACAD as a Strong Buy. Based on 9 analysts polled in the last 3 months, 7 rate a Buy on ACAD, while 2 maintain a Hold. The consensus price target stands at $45.50, marking a nearly 92% upside from where the stock is currently trading.