Acadia (ACAD) Down 10.9% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Acadia Pharmaceuticals (ACAD). Shares have lost about 10.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Acadia due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Acadia Q4 Earnings Miss, Nuplazid Sales Boost Revenues
Acadia Pharmaceuticals Inc. reported a fourth-quarter 2022 loss of 26 cents per share, just missing the Zacks Consensus Estimate of a loss of 25 cents. The loss was on par with our estimate of a loss of 26 cents per share. In the year-ago quarter, the company incurred a loss of 27 cents per share.
Total revenues, comprising net sales of Acadia's only marketed drug, Nuplazid (pimavanserin), increased 4% year over year to $136.5 million in the fourth quarter, beating the Zacks Consensus Estimate of $134 million. Nuplazid sales increased by 3.8% sequentially in the fourth quarter.
Nuplazid sales in the fourth quarter were driven by demand growth and growth acceleration in the long-term care channels.
Total revenues were also higher than our estimate of $134.9 million in the reported quarter.
Nuplazid is the first and the only FDA-approved treatment for hallucinations and delusions associated with Parkinson’s disease psychosis.
Quarter in Detail
Research and development (R&D) expenses in the quarter were $75.7 million, up 12.8% year over year, owing to a $60 million upfront payment for collaboration with Stoke Therapeutics, a $10 million milestone payment accrued to Neuren Pharmaceuticals upon acceptance of the trofinetide NDA filing and lastly, manufacturing and business development costs related to trofinetide.
Selling, general and administrative (SG&A) expenses were $104.4 million, down 1.3% year over year, owing to reduced advertising and promotional costs.
As of Dec 31, 2022, Acadia had cash, cash equivalents and investments worth $416.8 million compared with $436.6 million as of Sep 30, 2022.
Acadia clocked revenues of $517.2 million in the full-year 2022, witnessing a growth of 7% year over year from $484.1 million recorded in the year 2021 and beat the Zacks Consensus Estimate of $515.16 million. Total revenues for the year also beat our estimate of $515.6 million.
Loss per share, for the entire year 2022, was recorded at $1.34, wider than the Zacks Consensus Estimate of a loss of $1.32 per share. Loss per share for the full year 2022 was on par with our estimate of a loss of $1.34 per share.
2023 Financial Guidance
Acadia expects Nuplazid net sales in the range of $520-$550 million for 2023. The Zacks Consensus Estimate for the metric is pegged at $572.82 million.
The company expects R&D expenses in the $235-$255 million range, while SG&A expenses are expected to be in the range of $360-$380 million in 2023.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 29.78% due to these changes.
Currently, Acadia has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Acadia has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Acadia is part of the Zacks Medical - Biomedical and Genetics industry. Over the past month, Alkermes (ALKS), a stock from the same industry, has gained 2.1%. The company reported its results for the quarter ended December 2022 more than a month ago.
Alkermes reported revenues of $304.67 million in the last reported quarter, representing a year-over-year change of -6.1%. EPS of $0.14 for the same period compares with $0.23 a year ago.
For the current quarter, Alkermes is expected to post a loss of $0.03 per share, indicating a change of -125% from the year-ago quarter. The Zacks Consensus Estimate has changed +6.5% over the last 30 days.
Alkermes has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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