Here’s Why ACADIA Pharmaceuticals Stock Is Plummeting 25% Today


ACADIA Pharmaceuticals (NASDAQ:ACAD) just got hit with a bad bullet: a CNN research report questioning lead asset Nuplazid’s risk/reward as a treatment of Parksinson’s disease psychosis. Though the FDA committee voted in an overwhelming majority of 12 to 2 to give Nuplazid the green light, more and more “adverse events” are cropping up; life-and-death kind of stakes. As the rumor mill churns with fears of escalating dangers surrounding Nuplazid as a viable treatment, investors are fleeing, sending shares crashing 25% behind them in the aftermath.

Some patients are falling, unable to sleep, nauseous, and fatigued; the ones that live to tell the tale are making some experts question whether the advantages are even worth the price paid. Over 1,000 reports show patients keep suffering from hallucinations despite taking the treatment. There are even some reports now plaguing ACADIA’s reputation that its key drug could even be making patients’ psychosis worse than before.

Just five months ago, the Institute for Safe Medication Practices issued a red alert: from the time of Nuplazid’s launch through last March, 244 deaths were reported to the FDA. Keep in mind, however, just because adverse event reports are running amiss does not necessarily mean this drug in question is deemed at fault. Most of these reports just lead the agency to digest the prospective challenges and revise the label. In dire cases, though, the agency will strike a drug from the market.

Though Acadia and the FDA stand by Nuplazid (so far), the Institute for Safe Medication Practices believes all these cases highlight the treatment’s risk factor, giving validity to loud apprehensions that the drug could be more harmful than beneficial. The company’s senior scientist for drug safety and policy believes the deaths correlated with patients taking Nuplazid are a significant “warning” whistle to take heed and deserve a closer look by the agency for review. Following the institute’s analysis, data points to deaths that have climbed to an intimidating number: over 700. From the time of last summer, Acadia’s treatment is the sole drug posted as the alleged link behind a minimum of 500 of these death reports.

CNN points to doctors, medical researchers, and a horde of expert opinions with a resounding consensus of worry circling overhead Nuplazid’s approval- and whether it was too fast considering insufficient proof of safety or efficacy. The looming question: Does more need to be achieved to evaluate the risk factor here?

Founder and president of the National Center for Health Research Diana Zuckerman says, “This is almost unheard of, to have this many deaths reported.” In fact, Zuckerman goes on to mention that in these nonmandatory reports, some issues could be underrepresented, and she is not taking the negative buzz lightly: “You just don’t see this with most new drugs — you don’t see all these reports — so you have to take it seriously.”

Worthy of note, however, Nuplazid meets a significant, undermet need in the market- and that is part of the reason that even with noted risks, the drug won its approval handily. Consider that psychosis afflicts as much as half of an approximate one million patients in the United States bearing the brunt of Parkinson’s disease, as per the FDA- and Nuplazid is the first treatment given the opportunity to help these patients. The agency was not blind to Acadia’s lead asset’s “complex safety profile” when it was approved. Moreover, the FDA required the prescription be open on its label with a slew of warnings for physicians to take on prospective risks and advantages. Keep in mind, Nuplazid has been tagged with a black box warning already.

The biotech firm defends its drug, citing reasonable defense for reports of increasing fatalities: the very disease Nuplazid treats happens to be prevalent among those in the final stages, who already are at severe risk of death. Additionally, Nuplazid’s distributor works closely with specialty pharmas, which translates to personable contact between patients and their caregivers. As such, death reports may have a higher probability of emerging, and should Nuplazid’s distributor receive the news, it must tell the agency- a requirement.

Most of these cases usually involve elderly patients suffering not only from advanced stages of Parkinson’s disease, but likewise mounting other conditions; conditions that come along with their own assortment of medications that could be responsible for risk of death as well. The FDA has issued in a press statement support for Acadia’s Nuplazid: “Based on these data, the FDA has, at this time, not identified a specific safety issue that is not already adequately described in the product labeling.”

Yet, one thing is clear: The Street is on edge as to whether Nuplazid can be trusted as a safe treatment, even considering a pressing need to find help for Parkinson’s disease psychosis. It is quite disquieting when even former FDA medical officer and geriatric psychiatrist Susan Molchan finds herself at odds with a rising volume of deaths- and wondering if patients and loved ones understand the uncertain peril nipping at Nuplazid’s heels.

Analyst Ratings

Where does the rest of the Street side on this volatile biotech player? It appears mostly bullish, as TipRanks analytics demonstrate ACAD as a Buy. Out of 7 analysts polled in the last 12 months, nine are bullish on ACADIA stock while only one remains sidelined. With a return potential of nearly 229%, the stock’s consensus target price stands at $52.83.