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....
Initiating With Outperform (1)
January 28, 2013
Pimavanserin, Looking To "Shake-Up" The Antipsychotics Market
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.
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
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
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.