ACADIA PHARMACEUTICALS INC.
Headquarters: San Diego
CEO: Stephen Davis
August quarterly results: The company reported $57.1 million in revenue, an 87 percent year-over-year increase. Net loss was listed as $63.3 million.
Stock listing: ACAD on Nasdaq
Company description: Acadia’s Nuplazid was the first approved drug to treat hallucinations and delusions caused by Parkinson’s disease. The company is developing the drug for other indications.
Acadia Pharmaceuticals is flying higher after the U.S. Food and Drug Administration reaffirmed its drug in uncharacteristically public fashion.
The agency on Sept. 20 issued a statement saying it didn’t identify “new or unexpected safety findings” for Acadia’s Nuplazid, a drug that had been under reexamination. The conspicuous announcement struck analysts as unusual, but after months of media and investor scrutiny, the company has fresh momentum.
“I think it’s really important for patients and caregivers to get that kind of very clear statement from the FDA,” said CEO Stephen Davis.
In April, the FDA said it was taking another look at Nuplazid, a drug to treat hallucinations and delusions caused by Parkinson’s disease that it approved in 2016. The agency recommended that patients keep taking the drug during the review — but the damage was done.
That month, Acadia — one of the larger biotechs in San Diego with a $2.48 billion market cap — saw its stock sink to a four-year low.
The slide began with a CNN report that drew attention to a November publication from the Institute for Safe Medication Practices, which noted reports of more than 200 deaths of patients who had been using the drug through March 2017.
But after going through adverse event reports, the FDA on Sept. 20 stated those with Parkinson’s have a higher mortality rate than the general population. Further, Nuplazid was distributed through a specialty pharmacy network, increasing the likelihood that deaths would be reported to the manufacturer.
The CNN article also highlighted that an FDA advisory committee approved the drug by a 12-2 vote, but with reservations, including one member advocating further testing. Another reportedly voted in favor despite risk concerns because no other treatment exists.
The FDA said the drug’s labeling already outlines the risks through a “black box” warning.
“After a thorough review, FDA’s conclusion remains unchanged that the drug’s benefits outweigh its risks for patients,” said the FDA’s statement, going as far as to remind providers that Nuplazid is the only approved treatment for Parkinson’s psychosis.
Right after the announcement, J.P. Morgan analyst Cory Kasimov in a research note said this was clearly good news for Acadia investors, especially given “the FDA’s usual reluctance to comment on this matter and uncertain review timelines.”
On Sept. 25, Acadia’s stock closed at $21.41 a share, up 42 percent from the FDA announcement five days earlier.
But the impact of the April media reports, Kasimov indicated, could linger.
“We don’t expect commercial trends to reverse immediately,” he said.
In second quarter earnings in August, the company reported strong Nuplazid sales but said media attention slowed the growth of new Nuplazid patients compared with earlier in the year.
During the period Acadia recorded $57.1 million in revenue, an 87 percent year-over-year increase. But the company lowered its full-year revenue expectations from a range of $255-$270 million to between $210-$225 million.
In recent months, Acadia upped marketing efforts, including presentations at Parkinson’s groups and websites highlighting patients’ experiences. These are largely geared toward patients and caregivers, as Davis said CNN’s April articles didn’t shake the medical community’s confidence in the drug.
Nor the company’s.
“We never for a minute doubted or had any reservations about the data we generated,” he said. “Our view of the benefit-risk profile of the drug has never changed.”
Beyond this period of heightened scrutiny, the next 18 months look to be significant for Acadia. The company is hoping to expand the use of Nuplazid in other indications — dementia-related psychosis, schizophrenia-inadequate response, schizophrenia-negative symptoms and major depressive disorder — and will be reporting clinical trial data.
First up: results of a midstage trial in major depressive disorder later this year.
“I think this has the potential to be a really important drug in multiple disorders,” Davis said. He also stated the company will likely continue on the path of self-commercialization, a rarity in a region where biotechs typically partner on late-stage development and marketing.
Of note as well, the company in August expanded its pipeline. Acadia gained North American rights to Neuren Pharmaceuticals’ drug for Rett syndrome, which causes developmental and nervous system problems, mostly in girls.
Under the deal, Acadia agreed to pay Australia-based Neuren $10 million up front, and up to $455 million in development milestones. Next year, Acadia plans to initiate a final-stage trial of the drug.
Mark Brann, a professor at the University of Vermont, founded Acadia in 1993. Four years later the company relocated to San Diego.