ACAD
Full Needham report "ACAD: Pimavanserin Phase 3 Trial in Parkinson’s Disease Psychosis Generates Positive Results. Upgrading to BUY with $9 Price Target. "
Acadia Pharmaceuticals Inc. (ACAD) – Buy (was Hold)
ACAD: Pimavanserin Phase 3 Trial in Parkinson’s Disease Psychosis Generates Positive Results. Upgrading to BUY (was HOLD) with $9 Price Target.
Acadia announced this morning that the third Phase 3 trial of
pimavanserin in Parkinson’s disease psychosis (PDP) met the
primary endpoint of reduction in psychosis as assessed by SAPSPD.
The consistency of effect across all secondary and exploratory
measures (caregiver burden, sleep, clinical global improvement)
provides further evidence of a clinically meaningful impact. Acadia
is moving forward with plans to initiate another identical Phase 3
trial (Study 021) in the near future to support an NDA.
We had previously expressed concern that changes to trial design
relative to the previous two failed Phase 3 trials in PDP may not have
been sufficient for a positive outcome. Study 020 success is a clear
indicator that these changes were adequate. Given the positive
outcome today, we are upgrading to BUY (was HOLD). Our $9 price
target is based on 25x our 2017 $0.72 EPS estimate, discounted 20%.
• We believe PDP represents an attractive commercial opportunity for
a company with a small sales force. Notably, however, Acadia has
also previously shown utility of pimavanserin in schizophrenia in a
Phase 2 trial. We believe the market potential in PDP may be
~$500M and over $1B in schizophrenia. Acadia may also explore
efficacy in Alzheimer’s disease psychosis.
• We conservatively assume another 2 years to conduct Study 021,
which would allow for a commercial launch in 2016. Study 021 may
enroll more quickly than Study 020.
• Pimavanserin may be helpful in both early and late stages of PDP
according to S. Isaacson, an investigator in the Phase 3 trial.
Dopamine replacement, the standard treatment for PD, must often
be reduced to mitigate PDP. Pimavanserin appears well-positioned
to allow physicians to continue to treat patients with dopamine
replacement such that both PD and PDP symptoms can be
controlled.
COMPANY HIGHLIGHTS
ACADIA Pharmaceuticals, based in San Diego, CA, is a biopharmaceutical
company focused on the development of small molecule drugs for the treatment of central nervous system disorders.
Update on Pipeline Programs
Pimavanserin/ACP-103 (Schizophrenia, Parkinson’s Disease, Insomnia)
Pimavanserin, a selective 5HT-2A inverse agonist, is under development for
treatment-induced dysfunctions of Parkinson’s disease. Acadia has also explored
development for Alzheimer's disease psychosis and schizophrenia. The
compound was discovered internally at Acadia.
Acadia initiated the third Phase 3 trial of pimavanserin in PDP (Study 020) in July
2010. Enrollment of 198 patients was completed in September 2012. Patients
were randomized 1:1 to either 40 mg QD pimavanserin or placebo for 6 weeks on top of existing dopamine replacement therapy. The primary endpoint was
antipsychotic efficacy as assessed by nine items from the hallucinations and
delusions domains of the Scale for the Assessment of Positive Symptoms (SAPS).
The trial was 90% powered for a 3 point difference. Motoric tolerability was a
secondary endpoint (Parts II and III of the Unified Parkinson's Disease Rating
Scale--UPDRS).
Study 020 met the primary endpoint of improvement in the SAPS-PD score, with
the pimavanserin arm showing a 5.79 improvement vs. 2.73 improvement in the
placebo arm (p=0.001). Statistical significance was also achieved in secondary
endpoints of clinical global improvement (CGI-I scale, p=0.001), sleep (SCOPAsleep scale; p=0.045 nighttime sleep; p=0.012 daytime wakefulness) and caregiver burden (Caregiver Burden Scale, p=0.002). An additional Phase 3 trial (Study 021) will be needed for regulatory approval. This trial is expected to be identical in design to Study 020, with substantial overlap in trial sites.
The company implemented a number of changes to study 020 from Studies 012
and 014. These modifications included the following: 1) two arms (40mg vs.
placebo), rather than three; 2) Centralized patient ratings to standardize
assessments; Only patients in the U.S. had been evaluated in such a manner in
the first two Phase 3 trials; 3) Primary endpoint narrowed to include only the 9
SAPS items with the most pronounced baseline signals in patients with PDP; 20
hallucination and delusion items were assessed in the previous trials; 4) Socialtherapy lead-in prior to randomization in an attempt to limit placebo response; and 5) Enrollment of patients with more severe disease (higher baseline NPI/SAPS
scores).
SAPs Categories Evaluated in Study 020
Code Name
1 H1 Auditory Hallucinations
2 H3 Voices Conversing
3 H4 Somatic or Tactile Hallucinations
4 H6 Visual Hallucinations
5 H7 Global Rating of Severity of Hallucinations
6 D1 Persecutory Delusions
7 D2 Delusions of Jealousy
8 D7 Ideas and Delusions of Reference
9 D13 Global Rating of Severity of Delusions
RECENT AND EXPECTED UPCOMING MILESTONES
?? Report results of first Phase 3 trial of pimavanserin in PDP (3Q09)
?? Meet with FDA to review pimavanserin development path in schizophrenia (Biovail/2Q10)
?? Meet with FDA to review pimavanserin development path in PDP (2Q10)
?? Initiate 3rd Phase 3 trial of pimavanserin in PDP (3Q10)
?? Complete enrollment of Phase 3 trial of pimavanserin in PDP (Study 020; Sept 2012)
?? Announce positive results of Phase 3 trial of pimavanserin in PDP (Study 020; Nov 2012)
<!--[if !supportLists]-->- <!--[endif]-->Initiate second Phase 3 trial of pimavanserin in PDP (Study 021; YE12/1Q13)
FINANCIAL AND VALUATION ANALYSIS
We are upgrading our rating BUY (was HOLD) with a $9 price target. Our price
target is based on 25x our 2017 EPS estimate, discounted 20%.
We believe there is an attractive commercial opportunity for the company. No safe
and effective drugs are currently available for Parkinson’s disease psychosis.
Quetiapine is used extensively, despite sedation and disappointing efficacy in
clinical trials. Clozapine is recommended, but is rarely used because of the need
for weekly testing for agranulocytosis. Approximately 50% of PDP patients are
believed to be treated with an antipsychotic.
Estimates of PDP prevalence as a percentage of Parkinson’s disease patients
vary significantly, ranging from 8% to 40%. The number of patients with PDP may
range from 45,000 to 400,000 (Holt RJ et. al. J Neuro Clin Neurosci.
2010;22(1):105-110; Marsh L. Primary Psychiatry. 2005; 12(7) :56-62; Weintraub
D, Hurtig HI. Am J Psychiatry. 2007 Oct; 164(10): 1491-97; Weintraub D et. al.
Arch Neurol. 2011 Jul; 68(7):899-904).
Acadia Pharmaceuticals Clinical Pipeline
Product Indication Development Status Partnership Status
Target Comments
ACP-103 Pimavanserin Unpartnered
Parkinson’s Disease Psychosis Phase 3 Phase 3
Initiated July 2010
Results Nov 2012
Alzheimer's Disease Psychosis - No active development
Schizophrenia: Adjunctive Therapy Phase 2b - 5HT-2a Inverse Agonist Phase 2b Completed 2007
TBA
Neuropathic Pain Phase 2 Allergan Selective Alpha Adrenergic Agonists
Allergan Seeking Partner
AC-262271 Glaucoma Phase 1 Allergan Topical Muscarinic Agonist
ACP-105
Endocrinology Preclinical Unpartnered Non-steroidal Androgen Receptor Agonist - Seeking Partner
ACP-106 CNS Preclinical Unpartnered 5HT-2a Inverse Agonist On Hold
Source: Company Reports; Needham & Co.
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