Sounds good. Del Mar is certainly a beautiful area!
Fast track seems so logical to me so I've been scratching my head trying to figure out why Acadia hasn't chased this angle. They keep calling it an 'unmet medical need' which perfectly fits the criteria for fast track. I still think they will request it, but we shall see. If they do make this request then it will be very soon. I don't see any reason to hold off. The only possible reason is that Acadia really does need until late 2014 to get everything in.
What I would love to know is whether or not Acadia has ever filed for fast track status. I'm not sure that filing is necessarily 'public' information, but certainly being granted fast track would be public. Acadia definitely didn't announce that they would talk to the FDA about waving off the second Phase 3 so it stands to reason (my opinion anyway) that they may also request fast track and only address it with investors if it actually is granted.
Anyway, just my thoughts. Thanks for your email...I definitely drop you a line when I'm next in your area.
I remember Prana. I think they have interesting stuff, but they don't yet have the depth of patient data that Acadia has. Acadia has so many years of patient data and they did nail the Phase 3. Prana will likely still need to nail at least one Phase 3. Interesting company for sure, but I'm not sure they have quite the depth in terms of science. Also, the proposed MOA is the lowering of amyloid plaques. That's a really tough area at the moment with a lot of doubt. I know they're lowering metals and that there are other aspects. We'll see...I used to follow them closely. They're just much earlier than Acadia.
I think what has surprised me a bit on these boards is a fundamental lack of understanding about the clinical trial process and why having a Phase 3 waved off is so amazing. For one, it's only happened a handful of times and never before to a CNS company. This isn't just any company at this stage....what happened changes the company so drastically that no previous chart readings mean a whole lot. That isn't the same Acadia. It seems to me that only a small number of investors actually recognize the significance. I also think that groups like Baker Brothers are buying so aggressively because they know how cheap this is. If we fast-forwarded into the future and generated another set of positive Phase 3 results then we wouldn't think this was expensive. That's my opinion. I think too many investors are still viewing Acadia as if the still need efficacy data. This is an NDA-ready company. It's going to take some time to get it filed, but who knows what happens between then and now. A buyout offer could come at any moment if large pharma desires it. Baker Brothers seems to be wasting no time building a giant position. You have to wonder why they're doing that...they're smart investors. It's not just because it's somewhat exciting...it's because this has never happened in CNS previously and the candidate is a potential mega-blockbuster. That's the key here and for some reason a whole lot of investors on this board can't see it. All my opinion, but this is a rare company. I keep hearing Arena but they're not the same level. That's a one-dimensional drug for one indication and an undefined market. Pimavanserin addresses numerous huge markets where the unmet medical need is astounding.
It's not going to be easy for it to retest that kind of level when groups like Baker Brothers are holding 30% of the company. They seem to be accumulating at current levels so I think Acadia has matured beyond that point. It's just that we've jumped ahead in time. Waving off the second Phase 3 is the equivalent of Acadia having nailed the second Phase 3. It's just not the same company. Being ready for the NDA and needed one more trial are totally different things. Acadia is going to be on the shopping list of all the major pharmas as most have a strong CNS focus. There is no other company with a CNS candidate that can compare at all. Nothing.
I was actually researching this earlier today as well and was thinking about the timing of the ADP trial. A main key to the ADP trial is to make sure they take their time to enroll the correct patients. It's very important to make sure these are true Alzheimer's patients and not dementia patients. Acadia knows exactly how to do this so I'm not at all concerned.
Key upcoming events in my mind are as follows:
-launch of ADP trial.
-initiation of CMC and other needed studied for pimavanserin NDA.
- Any additional unexpected developments around pimavanserin in PDP. It is true that the current plan is to file the NDA in late 2014, but unexpected news regarding a faster timeline would certainly be a wonderful development.
-Proactive partnering interest. No other CNS has ever had a Phase 3 waved off and this is a blockbuster candidate so it's impossible to know how large pharma might respond. They don't have to wait for Acadia to come to them. A group like Pfizer with very strong CNS interest could make an offer at any point. You could almost see a bidding war and someone getting this for around $3B. I don't think that's an unreasonable number based on the data, Phase 3 status, NDA filing timeline and additional indication expansion. If Acadia gets it to market alone then $3B will be way too cheap. This are just my best guesses.
-I think Acadia and Acadia's BOD need to think actively about how best to expand the label after PDP. Is it by doing well controlled Phase 2's and then going for off-label (which can still be reimbursed in many cases) or is it be getting actual approval for each indication? This is where large pharma is really needed. I know Acadia wants to launch alone in PDP, but in reality it might be too big for them. There are decisions above and beyond PDP that need to be made today and development strategy will be essential. I think we'll see the appearance of large pharma before the NDA filing. Just my opinion.
Sentiment: Strong Buy
I like your post. Also, I think we have to look at the fact that there were 60M scripts written for atypical antipsychotics in 2012. That puts into perspective just how lucrative a new antipsychotic can be. The great thing is that it doesn't need to replace these antipsychotics in schizophrenia...it can work with them. In PDP and Alzheimer's it would be great to get rid of the atypicals...they're a nightmare. Pimavanserin could really change lives for the better and that's really the most exciting thing about Acadia. If loved ones can stay at home and not have to go to nursing homes then families stay together and our system saves a lot of money. This is a real win-win-win....patients/families, the system and investors. It's hard to beat that kind of combo.
I think we have to look at where Acadia was even 6 months ago.
- Six months ago it was unknown if pimavanserin would work.
-Five months ago we saw that it not only worked but worked incredibly well for PDP
-Just over three months ago we got more data on the results and found out that the results were even better than initial indications showed
-Under a month ago we found out that the results were so positive that the FDA waived off the second phase 3. I would note that this has never occurred in the CNS space. It's actually unprecedented and I've been following CNS companies in this space since the 1990's.
The above timeline is exactly what large pharma is working with. It hasn't even been a month since they learned that the next phase 3 was waved. There is no possible way for large pharma to move this fast. However, I believe (my opinion) that we will see serious interest in the Fall of 2013. As an investor, this summer is all about accumulation in my book.
The x-factor here is that an activist shareholder group could try to slip in below the radar and take Acadia out. Baker Brothers acquiring 30% of beyond interesting. Of course they recognize the value here and they could save it all for themselves.
Too cheap. I saw one net present value estimate of $17 today and that's not factoring in the upside for Alzheimer's or schizophrenia. Last year $60B in scripts were written for atypical antipsychotics. $23 can't come close to getting it done. My estimate for a price today would be $35-40. Once approval happens all bets are off. Sky becomes the limit...especially if Acadia generates positive Phase 2 results in Alzheimer's.
The biggest decision faced by Acadia is label expansion via additional NDA's or just generating Phase 2 results and then allowing for off-label prescribing. I like the idea of slow and methodical label expansion. Why not fully develop pimavanserin which could very easily be the next risperidone...just better! All my opinion, but the pima results have been astounding. Acadia is just getting warmed up and I wouldn't even entertain offers under $35...and I don't believe that they will. After approval the upside is incredible. I will be holding and have been holding...and buying much more.
You don't have the vaguest idea of what we need or what will come. Good luck reading this chart.
I don't think so. This team has been in place for a good while and had an excellent reputation. We have activist shareholders on the BOD. No one can expect them to file the NDA within 2013...that's not possible based on the CMC type work needed. I can easily live with a late 2014 filing even though I think it will come sooner. Also, large pharma is free to become proactive any time they feel like putting a bid on the table. That is very possible and we would know about it. There should be a lot of positive momentum for many months to come. I'm going to be sitting back very calmly and will add whenever I get a great opportunity.
Allergan had a huge sell off today with many funds in common with NBIX. A lot of groups dropped. I think it's portfolio realignment. Earnings are not going to show anything...we know they plan to end 2013 with roughly $130M and then in 2014 the AbbVie milestones start to come in.
Agree with that. It's good to have an activist shareholder on the BOD...it will absolutely be a good thing for fellow shareholders. Baker Bros is driven by returns. We're in the same boat.
Management makes a fortune in a buyout. The reality is that filing an NDA takes time. They just shaved away one Phase 3...that's a first ever in the CNS space.
This isn't correct. Top-line in Endometriosis in Q12014 and in UF it's Q42014. Listen to the webcast as the dates are clearly laid out.
Sentiment: Strong Buy
You probably know this, but Allergan and Acadia shares a number of investors. The losses for these investors were heavy in Allergan. For instance, Fidelity Management and Research Company owned about 10M shares in Acadia at the end of 2012. They hold 14M shares of Acadia so took a tremendous hit today. BlackRock Institutional Trust holds about 12.2M shares in Allergan and about 2.8M in Acadia. They too took a tremendous hit on their Allergan holding today. I think we're seeing some of these institutions having to make portfolio adjustments to cover nasty losses in Allergan. IMO, it's a buying opportunity and I bought!
60M prescriptions for atypical antipsychotics were written in 2012. Schizophrenia makes up only 30% of this. I think this gives us an idea of just how huge the market is for pimavanserin. There will many different atypical antipsychotics sharing this huge market....there is only one pimavanserin. Just one. This is it.
Needham webcast clearly says that data readout Q1 2014. You guys are talking about a safety extension to monitor bone loss which is required of all endometriosis drugs. Elagolix shows no evidence of this. Anyway, top line efficacy read out is Q1 2014 according to webcast at Needham this morning.
Sentiment: Strong Buy
I certainly agree with this, but would just add that the economics that are large pharma could throw at this could be really attractive. If an offer to buy at say $25/30 came then what would we all think? I agree that longer term there is much more upside. Heck, SmithKline was originally grown into a giant based off Tagamet. Cephalon is to me the most obvious comparison, but provigil never had this type of potential.
The key points in partnering (meaning licensing or M&A) and going alone IMO are:
1. The massive potential of pimavanserin - can a small group actually handle this launch? Yes, PDP can be profiled with a smallish sales force but the ultimate potential of pima in other indications is so large that it might take some large pharma strategy.
2. The additional clinical development of pima so that the label is as clean and broad as possible. PDP is just the start so they want to make sure to execute really well so that they can hit as many indications as possible.
3. Sales and marketing. Large pharma has the very obvious edge here.
Personally, I would like to see a deal or buyout with large pharma (I think). If a licensing deal, then Acadia should keep a small sales force and handle part of the launch.
Having said all of this, I'm of the opinion that Acadia is sitting pretty to be taken out. They have a very small employee base and own all rights to pimavanserin.
Ultimately, Acadia has to listen if a group throws a large offer their way. Alzheimer's, Parkison's and schizophrenia are all on the radars of large pharma and it is well known that CNS is an area of interest to just about every large pharma company. Here is an asset that cleanly checks off all of those boxes and with mega-blockbuster potential. I don't know if it will be a buyout, but I don't see Acadia going it alone. The potential is too broad and large pharma brings the necessary expertise to the table. The upside here is astounding IMO.
I'm looking forward to seeing the updated information for end of March. I guess that will be out very soon.