After a series of talks with depression key opinion leaders (KOL) about Acadia Pharmaceutical’s (ACAD) Ph2 CLARITY trial, all four experts believe the data reported supports the idea that the drug pimavanserin will serve well as a treatment for depression. This is despite inconsistencies between the depression clinical trials Stage 1 and Stage 2. After taking a bus trip to meet with ACAD executives, Cowen’s Ritu Baral says she remains comfortable with Pima sales ramp’s return of growth. The analyst reiterates an Outperform rating for biopharmaceutical ACAD with a price target of $42, which shows an upside of 115%.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, 5-star analyst Ritu Baral has a yearly average return of 25.7% and a 48% success rate. Baral has a -1.6% average loss when recommending ACAD, and is ranked #61 out of 5,134 analysts.
Baral says ACAD management seemed optimistic on NRx trends, clinician market research and execution and feedback of new patient-targeted outreach programs.
The issue for investors was that the trial was originally designed to differentiate the treatment effect from the high placebo effect that is often seen in depression trials. As a result, one might expect to see better efficacy in Stage 2 of the trial, which is the opposite of what was observed in the CLARITY trial. In turn, many investors discredited Stage 1 data. The analyst conducted four KOL calls with experts to understand the data set.
KOLs believed the pima CLARITY data showed real signals of efficacy for adjunct treatment of major depressive disorder and don’t see Stage 1 results as being a result of chance. Nevertheless, they did note a puzzling absence of signal in Stage 2 of the trial and attributed it in small part to sample size. Reportedly, all the KOLs were impressed by the response rates of pimavanserin that was collected in Stage 1 of the trial and are feeling optimistic about clinical potential as a therapy for those suffering with MDD. One of the KOLs even noted CLARITY was conducted in private, high-standard academic centers, which make the results of the trial that much more credible. Baral notes ACAD representatives stated the company intends to have as many of those sites as possible for Phase 3 of the trial.
“We find the pimavanserin statistical strength and consistency of data (between primary and secondary endpoints) of the Stage 1 data, consistency that is even sometimes echoed in Stage 2, convincing of a real efficacy signal in adjunct depression. We are even more convinced of this after our discussions with our KOLs (half of who are unaffiliated with ACAD) who argued that the Stage 1 results were highly credible and hold more weight than the Stage 2 data given its experimental nature, protocol and patient numbers. We rarely see unanimous agreement from KOLs on a drug‘s efficacy after murky, conflicting Phase 2 data and view this as an encouraging sign for pima in further development for adjunct depression,” Baral said.
“We look forward to the Phase 3 design specifically the powering of the trial and believe the trial will be well designed and powered for success off of CLARITY data. ACAD remains on track to meet with FDA shortly about the Phase 3 design (which will not include an SPCD stage) and start this trial in 1H19.”
Analysts on the Street who are keeping an eye on this biopharma are mostly bullish. TipRanks finds out of 10 analysts, 7 are bullish and 2 are sidelined. The consensus rating is considered a “Strong Buy,” with a price target of $32.50, which shows an upside of about 67%. (See ACAD’s price targets and analyst ratings on TipRanks)