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ACADIA Pharmaceuticals Inc. Message Board

  • rob_cos rob_cos Jan 29, 2013 10:16 AM Flag

    Cowen initiating with OP. "Pimavanserin, Looking To "Shake-Up" The Antipsychotics Market."

    Cowen "Pimavanserin, Looking To "Shake-Up" The Antipsychotics Market. Initiating with an outperform. Parkinson's Psychosis $1 billion market.Schizophrenia & Alzheimers disease psychosis next markets....

    Biotechnology

    Acadia Pharmaceuticals

    Initiating With Outperform (1)

    January 28, 2013

    Pimavanserin, Looking To "Shake-Up" The Antipsychotics Market

    Analysts



    Conclusion: Acadia is a CNS focused company with a lead drug, pimavanserin,

    in Phase III clinical development for Parkinson's disease psychosis (PDP).

    Currently, none of the approved antipsychotics are FDA approved for the

    indication of PDP. Seroquel and Clozaril are the two most prescribed off-label

    drugs for PDP but have critical flaws. Seroquel failed to demonstrate efficacy in

    multiple controlled trials and Clozaril can cause a life-threatening condition,

    agranulocytosis, in 1% of patients. Thus, PDP represents a lucrative market for

    which pimavanserin has the potential to be the first-in-class and the best-inclass

    drug for a growing PDP space. Additional indications for pimavanserin in

    the clinic include Alzheimer's disease psychosis (ADP) and schizophrenia (SZ).



     Pimavanserin is a 5HT2A (serotonin) inverse agonist and does

    not interact with D2. Antagonism at the D2 receptor is what makes

    existing antipsychotics so ill suited for Parkinson's patients. Pimavanserin

    is the result of drug screening designed a priori to filter out all of the

    unwanted drug characteristics while maintaining desirable traits.



     Pimavanserin, upside is significant. In the U.S. alone, approximately

    six million people suffer from PDP, ADP and SZ combined. We anticipate a

    U.S. commercial launch of pimavanserin in 2015, 2019 and 2020 for PDP,

    ADP and SZ, respectively. Based on conservative estimates, we anticipate

    profitability in 2017 with revenue of $89.2M and peak U.S. sales of $831M in

    the out year of our model, 2025.



     The antipsychotic space is crowded even for a differentiated

    compound. While pimavanserin is highly differentiated, in our opinion,

    the antipsychotic space is highly competitive and dominated mainly by

    generics. Acadia will have to be diligent on its eventual commercialization

    efforts in order to be ultimately successful.



    Investment Thesis

    We are initiating coverage of Acadia Pharmaceuticals with an Outperform rating.

    Acadia is a CNS focused company that has a product well positioned for eventual

    FDA approval in a CNS indication for which an FDA approved drug does not exist.

    Acadia is strategically pursuing pimavanserin, its lead drug candidate, for

    Parkinson’s disease psychosis, an estimated $1B market worldwide. The following

    reasons illustrate why pimavanserin will eventually succeed, in our opinion:



    • Pimavanserin was identified through Acadia’s proprietary drug screening platform

    that was specifically set up to identify small molecules that had the pharmacologic

    profile of an ideal antipsychotic, 5HT2A inverse agonism/antagonism, while lacking

    receptor interactions that confer unwanted side effects such as interactions with

    dopamine, histamine and alpha adrenergic receptors.



    • Due to the negative side effects, all currently available antipsychotics carry FDA

    mandated Boxed Warnings which include cardio-toxicities, irreversible movement

    disorders and metabolic syndromes. Phase II and III studies have demonstrated that

    pimavanserin is safe with regard to all of the above side effects. Pimavanserin has

    the potential to be the first and only antipsychotic without a Boxed Warning.



    • Seroquel and Clozaril, the two most commonly prescribed antipsychotics for PDP

    both have fatal flaws. Clozaril has the efficacy data but a fatal side effect which

    occurs in 1% of patients is too significant for physicians and the required weekly

    blood draws are too inconvenient for Parkinson’s patients who are already

    challenged physically. Seroquel is the most prescribed antipsychotic for PDP, but the

    use of Seroquel is not based on efficacy data from controlled trials but is driven by

    its relatively benign side effect profile.



    Acadia’s second confirmatory Phase III trial is in development and is expected to be

    completed by 1Q15 followed by an NDA filing in 2H15. If the recent successful Phase

    III study is any indication, we believe that as long as Acadia sticks with the existing

    trial design and inclusion/exclusion criteria, it has a high probability of achieving

    statistical significance in the confirmatory study.

    Additional indications for pimavanserin, which include Alzheimer’s disease

    psychosis and schizophrenia as well as numerous proprietary drug candidates in

    the pipeline, create significant additional upside potential.



    Psychosis, A Co-Morbidity Associated With A Host Of

    Diverse Neurologic Conditions

    Psychosis is a debilitating condition resulting from disturbances in the perception

    of reality. Although most often associated with schizophrenia (SZ), psychosis can

    also occur as a consequence of a variety of neurologic conditions including bipolar

    disorder, Alzheimer’s disease, Parkinson’s disease and major depressive disorder, to

    name a few. Disturbances in the perception of reality can result from either

    hallucinations and/or delusions.

    Hallucinations are defined as false senses of perception in any of the five sensory

    modalities which include visual, auditory (voices), tactile (touch), olfactory (smell)

    and gustatory (taste) sensations. Of these, auditory hallucinations are most

    commonly associated with schizophrenia while visual hallucinations are the most

    common form of hallucination associated with PDP. Hallucinations involving tactile,

    olfactory and gustatory sensory modalities are less common.

    Delusions are false beliefs firmly held by the person in spite of evidence to the

    contrary. Delusions are typically persecutory and grandiose in nature and can be

    further divided into bizarre or non-bizarre types. A bizarre delusion is one that is

    immediately recognized by an observer as outlandish and implausible such as aliens

    experimenting on the patient or patient’s thoughts being controlled through a

    satellite. Non-bizarre delusions include spousal affairs or neighbors plotting to evict

    the patient. Evaluations of non-bizarre delusions require more caution by the

    observer as they are within the realm of possibility. It is important in the diagnosis

    to ensure that such beliefs are not typical of the person’s culture and/or faith.

    Psychosis is a significant burden to caretakers as it can lead to agitation and even

    aggression resulting in retaliatory behavior and resistance to treatment. Psychosis is

    often considered more burdensome than the primary underlying neurologic

    condition and it is the most frequent reason for institutionalization of the patient.



    Parkinson’s Disease Psychosis (PDP): The Initial

    Pimavanserin Play

    Parkinson’s disease is characterized by movement disorders. However,

    complications of PD may also involve psychosis, sleep disturbances, dementia,

    depression and apathy which are significant co-morbidities and add to the disease

    burden. The reported prevalence of PD varies as Dementia with Lewy Bodies (DLB)

    can often mimic symptoms of PD and the two are often difficult to distinguish

    clinically. DLB is a type of dementia characterized by the presence of “Lewy bodies”

    which are pathologic aggregations of alpha-synuclein and ubiquitin proteins in

    neurons. Although the main clinical feature of DLB is cognitive impairment, both PD

    and DLB result in Parkinsonism and may require dopaminergic treatments. Since

    anti-Parkinsonism (dopaminergic) drugs known to-date exacerbate or trigger

    psychosis to varying degrees, physicians are particularly vigilant in identifying

    symptoms of psychosis. Further complicating the treatment of Parkinson’s disease

    is that fact that antipsychotics given for psychosis exacerbate movement

    disturbances to varying degrees. Thus, the treatment of PDP presents a unique

    challenge to clinicians.



    Pimavanserin As A Co-Therapy For Schizophrenia

    Psychosis is the hallmark of schizophrenia (SZ) and the associated symptoms

    include auditory hallucinations and delusions. Schizophrenics also suffer from

    impaired cognition which can be highly disruptive and lead to difficulty finding

    employment, adjusting to society and significantly increases the risk of suicide (5%

    life-time risk). World-wide prevalence of SZ is approximately 1% and the incidence of

    schizophrenia is skewed towards more developed countries.



    The current standard of care includes typical and atypical antipsychotics. Despite

    the availability of numerous drugs approved for schizophrenia, SZ represents an

    unmet need as current drugs are associated with significant side-effects such as

    Parkinsonism for typicals, metabolic syndromes for atypicals and agranulocytosis

    for clozapine.

    In March 2007, Acadia reported positive top-line results from its Phase II

    schizophrenia co-therapy trial with pimavanserin. The seven week (one week of

    screening, six weeks of drug therapy), multi-center, randomized, double-blind,

    placebo-controlled trial was designed to study the safety and efficacy of

    pimavanserin in combination with oral haloperidol, or oral risperidone.

    Risperidone is the second atypical antipsychotic to be released in the U.S. following

    clozapine and can be given orally or as a depot injection. Despite being classified as

    an atypical antipsychotic, risperidol, unlike its predecessor, clozapine, carries a

    significant risk of motoric symptoms as well as metabolic side effects in a dose

    dependent manner. The goal of the co-therapy study was to assess whether adding

    pimavanserin, to a lower dose of a typical or atypical antipsychotic can achieve

    similar levels of efficacy as compared to high dose antipsychotic.

    In the Phase II trial, a total of 423 patients across sites from the U.S. and Brazil were

    randomized to one of five study arms. The three risperidone study arms consisted

    of low dose (LD) risperidone (2mg) versus pimavanserin (20mg) plus low dose (LD)

    risperidone (2mg) versus high dose (HD) risperidone (6mg). The two haloperidol

    study arms comprised of haloperidol (2mg) plus placebo versus pimavanserin

    (20mg) plus haloperidol (2mg).

    The primary endpoint was the reduction in PANSS scale, a widely utilized

    psychometric tool for SZ. Pimavanserin/risperidone co-therapy resulted in a 23

    point reduction (27.4%) with a p value of less than 0.0001 (compared to pretreatment)

    which was similar to what was seen for the risperidone HD group. The p

    value between co-therapy and risperidone HD was not significant, meaning they

    were effectively equivalent. Also, the addition of pimavanserin to risperidone LD

    resulted in a significantly greater reduction in PANSS score as compared to LD

    risperidone alone (p=0.01).



    Pimavanserin For ADP

    Alzheimer’s disease is a neurodegenerative disease characterized by a progressive

    deterioration in cognitive function as well as a variety of associated co-morbidities

    including psychosis. According to the Alzheimer’s Association, the prevalence of AD

    is approximately 5.4 million in the U.S., of which 25% to 50% of AD patients may

    develop psychosis. The World Health Organization (WHO) estimates the worldwide

    prevalence rate of AD will be approximately 0.44% by 2015.



    Similar to PDP, ADP involves visual hallucinations and delusions which can lead to

    agitation and aggression and is a major contributor to caregiver burden and

    eventual institutionalization of the patient.



    Currently, there is no approved antipsychotic for the treatment of ADP. Therefore,

    typical and atypical antipsychotics are utilized off-label for ADP. As mounting

    evidence points to selective 5HT2A inverse agonism/antagonism as the ideal

    solution for treating hallucinations and delusions associated with AD, pimavanserin

    is currently the focus of investigation for this indication by Acadia.



    As a proof of principle, recent animal model studies of AD published in 2012

    demonstrated that pimavanserin was able to reverse the amyloid induced AD-like

    behaviors in mice. Based on the animal studies as well as extensive clinical trial data

    to-date demonstrating safety, Acadia has recently established a protocol for the

    Phase II clinical trial of pimavanserin for ADP. Acadia expects to initiate enrollment

    for the Phase IIa proof of concept study in 2H13 and anticipates that the study will

    take approximately two years to complete.

 
ACAD
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