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ACADIA (ACAD) Q3 Earnings Miss, Nuplazid Drives Revenues Y/Y

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Zacks Equity Research
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ACADIA Pharmaceuticals Inc. ACAD reported third-quarter 2020 loss of 54 cents per share, wider than the Zacks Consensus Estimate of a loss of 38 cents as well as the year-ago loss of 29 cents.

Total revenues comprising net sales of the company’s only marketed drug Nuplazid (pimavanserin) jumped 27% year over year to $120.6 million in the third quarter. The top line surpassed the Zacks Consensus Estimate of $119 million.

We note that Nuplazid is the first and the only FDA-approved treatment of hallucinations and delusions associated with Parkinson’s disease psychosis. On the third-quarter conference call, management stated that sales of Nuplazid grew steadily both year over year and sequentially, driven by a strong commercial execution.

Owing to the earnings miss, shares of ACADIA were down 5.2% in after-hours trading on Wednesday. However, the stock has rallied 14.9% in the year so far against the industry’s decrease of 6.3%.

Quarter in Detail

Research and development (R&D) expenses were $120.1 million in the quarter, up 91.8% from the year-ago period due to higher expenses related to the acquisition of CerSci Therapeutics in August 2020.

Selling, general and administrative (SG&A) expenses rose 12.2% year over year to $81.6 million due to increased advertising and promotional costs, and higher personnel costs.

As of Sep 30, 2020, ACADIA had cash, cash equivalents and investments worth $644.4 million compared with $658.6 million as of Jun 30, 2020.

2020 Guidance

ACADIA reiterated its net sales view for Nuplazid. The company expects total revenues in the range of $430-$450 million for 2020. The Zacks Consensus Estimate for the metric stands at $442.5 million.

Meanwhile, the company increased its R&D expenses for the full year, to $325-$340 million compared with the previous guided range of $265-$280 million. SG&A expenses are projected in the band of $385-$400 million, lower than the earlier forecast of $400-$420 million.

Pipeline Updates

Several additional studies on Nuplazid targeting different central nervous system (CNS) indications are currently underway. A potential label expansion will boost the drug’s sales in the future quarters.

Nuplazid is currently under review in the United States for treating hallucinations and delusions associated with dementia-related psychosis (DRP). The FDA set an action date of Apr 3, 2021. If approved, Nuplazid will get a potential second indication on its label. The supplemental new drug application (sNDA) for Nuplazid was based on data from the pivotal phase III HARMONY study.

Other studies on Nuplazid include the phase II ADVANCE study for addressing schizophrenia’s negative symptoms. The company initiated a second pivotal phase III study ADVANCE-2 on Nupalzid in August 2020 for treating negative symptoms of schizophrenia. Currently, there is no FDA-approved treatment option for the given condition.

This apart, ACADIA is evaluating the pipeline candidate trofinetide in the phase III LAVENDER study for the treatment of Rett syndrome, a rare neurodevelopmental congenital CNS disorder for girls aged between five and 20 years. Top-line data from the same is expected in the second half of 2021.

We note that in August 2020, ACADIA acquired privately-held company CerSci Therapeutics. Following this, it gained the worldwide rights to a portfolio of novel compounds for neurological conditions including non-opioid therapies for acute and chronic pain.

ACADIA plans to begin a phase II clinical study during the first half of 2021 on ACP-044, CerSci’s lead molecule, which is being developed to address various pain indications.

ACADIA Pharmaceuticals Inc. Price, Consensus and EPS Surprise

ACADIA Pharmaceuticals Inc. Price, Consensus and EPS Surprise
ACADIA Pharmaceuticals Inc. Price, Consensus and EPS Surprise

ACADIA Pharmaceuticals Inc. price-consensus-eps-surprise-chart | ACADIA Pharmaceuticals Inc. Quote

Zacks Rank & Stocks to Consider

ACADIA currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the healthcare sector include Fulcrum Therapeutics, Inc. FULC, Halozyme Therapeutics, Inc. HALO and Eton Pharmaceuticals, Inc. ETON, all carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Fulcrum Therapeutics’ loss per share estimates have narrowed 1.1% for 2020 and 0.9% for 2021 over the past 60 days.

Halozyme’s earnings estimates have been revised 4.2% and 1.4% upward for 2020 and 2021 each over the past 60 days. The stock has rallied 85.7% year to date.

Eton Pharmaceuticals’ loss per share estimates have narrowed 0.9% for 2020 and 2.2% for 2021 over the past 60 days.

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