Cowen Report out today:
After an investors meeting in New York City this week with ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) touching base about its upcoming commercial launch for Nuplazid, Cowen analyst Ritu Baral reiterates a Buy with a price target of $42.00; essentially a 13% increase from where the stock is currently trading.
Baral finds cautious optimism from the minds of management at ACAD for pipeline drug Nuplazid, the first and only FDA-approved drug created to treat hallucinations and delusions from psychosis people suffering from Parkinson’s disease. Though the analyst believes Nuplazid will eventually pick up in market sales, he notes it will take some time to build up that momentum. Even ACAD understands this; a reason Baral gives for the pharmaceutical company’s delay in providing guidance for the next coming financial quarters. Once the numbers roll in, ACAD fully intends to provide guidance.
Presently, ACAD’s centralized efforts intend to raise awareness of not only the company’s drug, Nuplazid, but also of Parkinson’s Disease Psychosis (PDP). This is a strategy which Baral thinks will serve ACADIA Pharmaceuticals well to “meaningfully increase to prescriber familiarity of the drug and ultimately translate to a realization of full revenue potential.” Baral expects a move from raising awareness to full-focused consumer campaign likely to commence either by early or middle of 2017. While Baral conservatively estimates modeling zero for the second financial quarter, by 2016, she predicts $14.2MM. ACAD has not seen a great deal of payor pushback yet- a positive for the biotech company. Down the road, the analyst forecasts a high gross to net discount in the range of 25 to 40%.
Baral assesses ACAD to be long-term minded, with high hopes that over a span of the next two years, there will be improved insight as far as both the clinical and commercial value of Nuplazid. The analyst believes this insight, “could translate to a more attractive potentially acquisition price and return for shareholders.”
Another study holding a great deal of anticipation for ACAD is its Phase 2 data, which is on track for the fourth quarter, for pimavanserin- another psychosis-treating drug, but for Alzheimer’s disease (ADP). Baral exercises caution, but notes that “ADP would be a very large, untapped market for ACAD.” Facing an FDA delay, this trial could very well be initiated by 2016.
