Acadia Pharmaceuticals (ACAD)
Shares of Acadia Pharmaceuticals tanked around 30% in after hours trade on 3/11/15 after it had announced two different sets of news. The first set of news was that the CEO of Acadia Uli Hacksell would not only be stepping down as the CEO of the company but stepping down from the board of directors as well. Uli Hacksell has been the company CEO since 2000 so his departure now is a little bit awkward in nature. Why the CEO has decided to depart now is not clearly known, but this type of news never bodes well for the stock in the short-term as it creates a lot of uncertainty. For the time being the current Chief Financial Officer Steve Davis will take over as the Interim CEO until the company can find a more suitable person to run the company.
In addition to the CEO retiring abruptly Acadia reported that it would have to delay the NDA filing for Nuplazid — known as pimavanserin — all the way until the 2nd half of 2015. This puts the company way behind schedule because without this delay the company would have filed the NDA for Nuplazid this month in March. Typically when a company files for FDA approval for a drug it takes about 10 months or so for review by the FDA panel. Therefore this delay puts a huge roadblock for the company itself. If the company files for NDA approval by the 2nd half of 2015 that would put the FDA review time around mid 2016. Nuplazid is a selective serotonin inverse agonist that is being used to target 5-HT2A receptors in patients with Parkinson’s Disease Psychosis. More specifically the company is targeting the non-motor functions associated with the disease. That means the drug will be primarily targeting mental problems that patients would typically experience with Parkinson’s.
The one key thing to note though is that Nuplazid is a New Chemical Entity — NCE — which means that the FDA has never approved a drug of this chemical type. In addition the FDA provides companies that seek FDA approval for NCE drugs longer market exclusivity which gives the company longer access to sell the drug for greater revenue. Nuplazid was being tested in a large phase III trial that enrolled 199 patients in total in which patients were randomized. Each set of patients either received 40 mg of Nuplazid or a placebo compound once-daily for 6-weeks straight. Patients were then screened two weeks later to determine if Nuplazid showed greater efficacy than its placebo counterpart. The trial proved that Nuplazid was better than its placebo counterpart according to a sophisticated scale known as the SAPS-PD — Scale for the Assessment of Positive Symptoms. The Nuplazid arm demonstrated a 5.79 point improvement in psychosis at day 43 compared to placebo which only showed a 2.73 point improvement in the same time period. The difference of 3.06 points created a p-value of p =.001, which means the trial was significant and met the primary endpoint of the study. If ultimately approved Nuplazid would be the first drug ever to be approved for Parkinson’s Disease Psychosis — which deals with the non-motor part of the disease. Investors should keep an eye on this company in the coming months as it may soon recover despite these setbacks. More about the press release can be found here.
Shares of Neuralstem tanked around 30% on 3/12/15 after the company reported results for its phase II trial being pursued to treat patients with Amyotrophic lateral schlerosis. The company is using stem cell therapy in hopes of being able to regenerate the patient’s brain and spinal cord to improve movement functions. The primary endpoint of the study was set up to test safety. This was to determine if a patient could be transplanted with 16 million cells in a surgery format and that the patient would be able to tolerate such a treatment.
The Secondary endpoint of the study was to assess efficacy of Neuralstem’s drug NSI-566 in patients with ALS. There were about 7 out of 15 patients, or 47% who responded to the stem cell therapy treatment. One thing to take note of is that the company chose to run this trial as a stand-alone trial meaning there was no placebo counterpart involved. While there is no placebo to compare the company’s treatment to we can say that trial was still successful in that roughly 50% of the patients enrolled responded to the treatment. These patients with ALS have few treatment options that can help them so having about half of the patients respond to NSI-566 shows great promise. For instance the one treatment that does exist for ALS, known as Rilutek, has a lot of side effects. For example side effects from Rilutek that have a greater than 10% chance of occurring are: Nausea, Weakness, and decreased lung function. This compares to Neuralstem’s NSI-566 treatment with only one patient who experienced a surgical adverse event.
It is no question that the share price for Nueralstem has tanked on this news but it seems a lot of investors have misunderstood what these results were establishing. The company intentionally ran a phase II trial without a placebo counerpart. Contrary to popular belief biotech companies don’t do this because their drug is a failure. They do this to determine the maximum tolerated dose and to see what efficacy can be achieved with the current treatment regimen — consider it like an exploratory trial. Going forward the company can fine tune the primary endpoint of the trial with the FDA and in addition they can now run a larger trial with a placebo counterpart. Which means the company will be able to assess the NSI-566 treatment in terms of efficacy by comparing it to a placebo compound. Neuralstem expects this larger trial for NSI-566 to begin by the summer of 2015 although results from this trial won’t probably be ready until sometime in 2016. Going forward the company is in good shape therefore investors should look into the company’s pipeline prospects. Having said that there is still a lot of risk going forward both in short-term swings and long term volatility depending upon further trial results. More about this news can be found here.
Amarin Corporation PLC (AMRN)
Shares of Amarin have been on a huge upswing lately especially after the huge analyst upgrade which occurred on 3/12/15. The analyst upgrade came from HC. Wainwright which took Amarin from a Neutral to a Buy Rating with a price target of $10 per share. Shares of Amarin soared roughly 23% on that analyst upgrade and in addition went up the next day an additional 20%. Shares of Amarin are up 50% over the last 5 days and there is plenty of room for the share price to appreciate in the coming months.Amarin is responsible for producing a drug known as Vascepa which was approved by the FDA back in July of 2012 to reduce patients’ high triglyceride levels. The company has done well and continues to do well with Vascepa as it continues to grow its product revenue in the market. For instance product revenue for year-end 2014 was at $54.2 million dollars compared to $26.4 million by year end 2013, which is a 105% increase year over year. The company is set in terms of funds for quite some time as well because in the week prior the company had announced that it had entered into a private placement agreement with both current and new investors for approximately $52 million dollars in funding. The company will use these funds for general corporate purposes and in addition continue to market its cholesterol drug Vascepa in multiple territories.