ACAD: Pimavanserin Development Remains On Track

Zacks Small Cap Research
November 8, 2013

By Jason Napodano, CFA

At its third quarter
 earnings conference call, Acadia Pharmaceuticals (ACAD) announced the achievement of several clinical and regulatory milestones, including initiation of the Alzheimer’s Disease Psychosis (APD) trial this month, the completion of three registration batches of pimavanserin, initiation of stability testing in October, and the initiation of drug-drug interaction studies. The company also hired Terry Moore as Chief Commercialization Officer in the third quarter, and has been building out the commercialization infrastructure. Discussions with EU regulators continue, and the company expects to provide a detailed roadmap to European approval by the middle of next year. Finally, the results of the Phase 3 trial of pimavanserin in Parkinson’s Disease Psychosis (PDP) were published in the Lancet on November 1, 2013.

The Phase 2 clinical trial of pimavanserin in ADP, Study-019, will follow a similar design of the successful Phase 3 trial in PDP, in incorporating a screening period with brief psychosocial therapy and a limited number of trained raters. Study-019 will be a double blind, placebo-controlled study seeking to enroll about 200 patients. The study will be conducted through a network of research care facilities established as part of the Biomedical Research Centre for Mental Health at King’s College, London. This institution incorporates a geographically focused network of nursing care homes that will facilitate the use of a limited number of raters. As in the PDP trial, this is expected to limit statistical “noise” in the efficacy analysis. Patients will be randomized 1:1 between pimavanserin and placebo, treated for 12 weeks, with the primary efficacy endpoint being the change from baseline to Week 6. Endpoints will include the neuropsychiatric inventory and the nursing home (NPINH) scale with measurements of psychosis, aggression, agitation, sleep, nighttime behavior, and other exploratory endpoints. The full 12 weeks of treatment will allow the exploration of other endpoints, including determining whether there are any negative impacts on cognition. The company believes, while it was too early to offer a detailed estimate, it may take up to two years from initiation of enrollment to top-line results. That means data from the Phase 2 ADP program late 2015.

Development of pimavanserin in the PDP indication continues on pace, with the completion of the three registry batches mentioned above. The company plans a CMC meeting with the U.S. FDA after 3 months of stability data is available, but anticipates that the usual 12 months data will be required for the filing of the NDA. The open-label extension study of the PDP trial is still ongoing, and data is suggestive of continued efficacy. Patient exposure to the drug already exceeds the ICH guidelines for long-term exposure, with over 200 patients having been exposed for a year or more. The safety data continue to show that the drug is generally safe and well-tolerated.

Pre-commercialization activities under new Chief Commercialization Officer, Terry Moore, include market research, education, outreach, branding, and pricing work. The company currently anticipates being able to market and promote pimavanserin itself to high prescribing neurologists in the U.S. with 75 sales representatives.

Quick Financial Recap

On November 6, 2013, Acadia 
reported financial results for the third quarter 2013. Revenues in the third quarter 2013 totaled $240,000 compared to $3.5 million for the third quarter of 2012, primarily due to the termination of Acadia’s collaboration with Meiji Seika Pharma in July 2012, which resulted in the recognition of the remaining $3.0 million dollars in deferred revenue from the collaboration.

Net loss for the quarter totaled $10.7 million, or $0.12 per share, compared to a net loss of $2.4 million, or $0.04 per share, in the third quarter of 2012. The net loss included $1.9 million in non-cash, stock-based compensation expense. R&D expenses were $7.3 million compared to $4.4 million in the third quarter of 2012, with the increase being driving by the pimavanserin Phase 3 program expenses as well as by increased personnel and stock-based compensation expenses. SG&A expenses increased to $3.8 million in the third quarter of 2013, compared to $1.5 million in the third quarter of 2012. The increase was mainly driven by increased stock-based compensation costs, personnel costs, and professional fees.

Acadia Pharmaceuticals exited the third quarter 2013 with approximately $196.2 million in cash, cash equivalents, and short-term investments. An aggregate of $23 million in cash was used to fund operations in the first nine months of the financial year.

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