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Will Nuplazid Aid Growth for ACADIA (ACAD) in Q3 Earnings?

Zacks Equity Research

We expect ACADIA Pharmaceuticals Inc. ACAD to beat on earnings when it reports third-quarter 2019 results on Oct 30, after the market closes.

The company’s track record has been mixed so far, having delivered a positive surprise thrice in the trailing four quarters and missing the same once, the average beat being 7.75%. In the last reported quarter, ACADIA came up with a positive surprise of 17.39%.

Shares of ACADIA have skyrocketed 154.4% so far this year versus the industry’s decrease of 2.5%.

Let’s see how things are shaping up for the upcoming quarterly results.

Factors to Consider

ACADIA is focused on developing products to treat unmet medical needs in the central nervous system (CNS). The company’s top line mainly comprises revenues from its sole marketed drug Nuplazid (pimavanserin), which is the first and the only FDA-approved treatment for hallucinations and delusions associated with Parkinson’s disease psychosis.

Nuplazid has been a strong performer and recorded sales of $83.2 million in the second quarter of 2019, reflecting 46% growth year over year. The drug is likely to have performed well and contributed to significant revenues in third-quarter 2019 as well.

Significantly in September 2019, Nuplazid met the primary endpoint in the phase III HARMONY study by showing statistically significant superiority over placebo in increasing the time to relapse of dementia-related psychosis.

ACADIA is planning to meet with the FDA authorities soon for discussing a possible submission of a supplemental new drug application for Nupalzid in 2020. Investor will be keen to get an update on the same during the upcoming earnings call as a potential label expansion will boost the drug’s sales in the future quarters.

Meanwhile, ACADIA is also studying Nuplazid for other CNS indications, such as schizophrenia inadequate response (phase III ENHANCE study), schizophrenia negative symptoms (ADVANCE study) and as an adjunctive treatment of major depressive disorder (phase III CLARITY study).

This apart, ACADIA plans to initiate a phase III study on trofinetide for the treatment of Rett syndrome in girls aged between five and 20 years in the fourth quarter of 2019.

We expect management to provide an update on all these studies during the upcoming investors’ call.

Why a Likely Earnings Beat?

Our proven model predicts an earnings beat for ACADIA this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: ACADIA has an Earnings ESP of +5.26% as the Zacks Consensus Estimate is pegged at a loss of 41 cents per share and the Most Accurate Estimate stands at a loss of 39 cents.

Zacks Rank: ACADIA has a Zacks Rank #3, which increases the predictive power of ESP. You can see the complete list of today’s Zacks #1 Rank stocks here.

ACADIA Pharmaceuticals Inc. Price and EPS Surprise

ACADIA Pharmaceuticals Inc. Price and EPS Surprise

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

Stocks That Warrant a Look

Here are a few healthcare stocks worth considering as our model shows that these have the right mix of elements to beat estimates this time around.

Incyte Corporation INCY has an Earnings ESP of +1.15% and a Zacks Rank of 1. The company is scheduled to release results on Oct 29.

Amgen, Inc. AMGN has an Earnings ESP of +0.50% and a Zacks Rank of 3. The company is scheduled to release results on Oct 29.

Alnylam Pharmaceuticals, Inc. ALNY has an Earnings ESP of +0.28% and a Zacks Rank #2. The company is scheduled to release results on Oct 31.

5 Stocks Set to Double

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Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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