ACAD: 2Q13 Review. Reiterating BUY Rating and Raising Price Target to $26.
Acadia management provided a corporate update yesterday in a quarterly conference call. management reiterated guidance for submission of an NDA for pimavanserin in Parkinson’s Disease Psychosis (PDP) by YE14. As a reminder, the FDA indicated in April 2013 that one successful pimavanserin Phase 3 trial (Study 020) in PDP would suffice for a regulatory filing. Given the strength of Study 020 outcome on all primary and secondary endpoints and FDA flexibility, we believe approval is likely in 2H15. We reiterate our BUY rating and are raising our price target to $26 (was $16), which reflects 25x our $1.87 2018 EPS estimate, discounted 15% annually.
A pre-NDA meeting with the FDA is expected later this year. The company also plans to begin meetings with European regulatory officials in 2H13, consistent with prior guidance.
Acadia is preparing to manufacture registration batches of pimavanserin. Stability testing of this material, the gating item to NDA submission, is likely to begin by YE13. Drug-drug interaction studies are already underway.
Preparations continue for a Phase 2 trial of pimavanserin in Alzheimer’s Disease Psychosis (ADP). Management reiterated guidance for a trial to begin in 2H13. This 12-week trial is expected to enroll ~200 pts randomized 1:1 against placebo. Several elements of Study 020 in PDP will be incorporated into the ADP trial, including centralized raters and a pre-dosing run-in assessment.
Acadia announced in June 2013 that partner Allergan nominated a second compound for development in glaucoma. Preclinical studies are underway. Allergan is responsible for all development and commercialization costs.
ACADIA ended 2Q13 with $205.5 in cash, up from $101.5M in 1Q13. This includes $107.9M i