It has been about a month since the last earnings report for Acadia Pharmaceuticals (ACAD). Shares have lost about 7.6% 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’s Q1 Earnings and Revenues Fall Shy of Estimates
ACADIA reported first-quarter 2020 loss of 57 cents per share, wider than the Zacks Consensus Estimate of a loss of 46 cents but narrower than the year-ago loss of 59 cents.
Total revenues comprising net sales of the company’s sole marketed drug Nuplazid surged 43% year over year to $90.1 million in the first quarter. However, the top line missed the Zacks Consensus Estimate of $93 million.
Quarter in Detail
Sales of Nuplazid grew steadily both year over year and sequentially. On first-quarter conference call, management stated that a strong base of patients is continuing treatment with Nuplazid. However, the current environment can pose a short-term challenge to the rate of new patient growth.
Research and development (R&D) expenses were $72.6 million in the quarter, up 37.2% from the year-ago period due to higher development costs for the pipeline candidate trofinetide and an upfront payment made to Vanderbilt University.
Selling, general and administrative (SG&A) expenses rose 9.6% year over year to $102 million due to increased medical expense and higher personnel costs.
As of Mar 31, 2020, ACADIA had cash, cash equivalents and investments worth $651.4million compared with $697.4 million as of Dec31, 2019.
Prompted by the plaguing COVID-19 pandemic, ACADIA lowered its 2020 revenue guidance by approximately 5%.
The company now expects total Nuplazid revenues in the range of $420-$450 million for the full year compared with the previous guidance of $440-$470 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
At this time, Acadia has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. 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 this revision looks promising. Notably, Acadia has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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