NEW YORK (AP) -- Shares of Acadia Pharmaceuticals Inc. rose Monday on investor optimism about the prospects for its drug candidate pimavanserin, which is designed to treat psychosis in patients with Parkinson's disease.
THE SPARK: Jefferies analyst Thomas Wei backed his "Buy" rating and $13 price target for the stock, saying that overall feedback on new data from a study of pimavanserin has been positive. The analyst said Jefferies spoke with 28 neurologists about the drug at a recent conference.
THE BIG PICTURE: The San Diego company said last week that the drug met a series of secondary goals in the clinical trial. According to a scale that measures patients' improvement during treatment, about twice as many patients who took pimavanserin were rated "very much improved" or "much improved" compared to patients who took a placebo.
Acadia said patients treated with pimavanserin were less likely to suffer hallucinations and delusions.
According to the company, up to 60 percent of Americans with Parkinson's disease develop psychosis and there is no approved therapy to treat the condition. The company said anti-psychotic drugs are sometimes used, but those drugs can increase the risk of death and cause side effects like further loss of motor control.
Pimavanserin is Acadia's most advanced experimental drug. The company does not have any approved products.
THE ANALYSIS: Wei backed his "Buy" rating and $13 price target for Acadia. He said that, of the doctors interviewed, only one voiced concerns that the improvements attributed to the drug may not be dramatic enough to get it approved.
Wei said that based on the "robustness" of the data and lack of approved treatments, the magnitude of improvements shouldn't be an issue in getting the drug approved by regulators or for it to be commercially adopted.
THE SHARES: Up 55 cents, or 7.3 percent, to $8.12 in heavy afternoon trading, after peaking at $8.55 earlier in the day.
On Thursday, when the data was name public, the stock hit $8.81, the highest price since the spring of 2008.