Acadia Pharmaceuticals (NASDAQ:ACAD)

On Monday, Acadia Pharmaceuticals announced that it had initiated a phase 2 trial in patients with Alzheimer's Disease Agitation. Once again ACAD will use its drug Pimavanserin to see if the drug will work in this targeted indication. The company has already received FDA approval for Pimavanserin in Parkinson's Disease Psychosis. Now the drug is being tested in another indication and it is difficult to gauge whether or not it will be successful in that disease. Still, considering that ACAD already has FDA approval for Parkinson's Disease Psychosis, any kind of failure in this new indication won't really hinder the stock in any severe way.

Phase 2 Trial Design

The most important aspect of a biotechnology company is for the technology or drug to be superior to the current standard of care treatments. Despite that, there are other things that management must do in order to ensure that a trial is successful. In this case, ACAD announced the phase 2 trial initiation for patients with Alzheimer's Disease Agitation. This phase 2 trial will be known as "SERENE". It will recruit a total of 430 patients who have Alzheimer's Agitation or aggression. Patients in the trial will be split up into three different groups. One group of patients will take one daily dose of 34 mg pimavanserin, one group will take 20 mg pimavanserin, and the final group will take the placebo compound instead. One thing to keep in mind is that each dose will be given once a day over a 12-week period. That sounds like a short study, and while treatment time will be short it will take a long time to recruit that many patients into the trial. That means that it could take between 1 to 2 years before results from this trial are announced. That means that it won't be a catalyst for quite some time with respect to this study. The primary endpoint of the trial will be looking for a reduction of an Alzheimer's agitation score. This score will be measured using a system called "Cohen-Mansfield Agitation Inventory".

Severe Need

This indication that ACAD is targeting next is very important, because like Parkinson's Disease Psychosis, there are no other treatment options. That means that the company has the opportunity to tap into another market that has no current therapies for. Of course it will also be good for patients because nothing exists to help them with respect to their disease. The Executive Vice President of ACAD, Serge Stankovic had this to say:

"AD Agitation is a common condition and a major cause of distress for Alzheimer's patients, their families and caregivers"

As noted before, there is no current therapy to treat this disease. As mentioned above Alzheimer's Disease Agitation not only affects the patient, but also has a devastating affect on families and caregivers as well. If Pimavanserin can be successful in this indication it would bring a lot of relief for many families out there.

Moving Forward

ACAD stock is almost appropriately priced at $23.31 per share. That means that it has a market cap of $2.79 billion, and considering that it has already received approval for Pimavanserin in Parkinson's Disease Psychosis it makes plenty of sense. As mentioned before the phase 2 trial won't complete until a few years from now so any catalyst from the new indication won't happen for quite some time. The good news is that there might be a short-term bump in the stock as investors cheer the new indication targeting a large market. It is still highly bullish that the trial has started and a good reason for the stock to trade up because of this. Also it doesn't hurt that Q3 earnings are on the way and any positive indication for Nuplazid -- previously Pimavanserin -- sales going up will be highly bullish for the stock.

[Image Courtesy of Wikipedia]

NO COMMENTS

Leave a Reply