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Acadia Stock Jumps on Positive Dementia-Related Psychosis Drug Data

Xconomy San Diego — 

An Acadia Pharmaceuticals drug that’s already approved for psychosis associated with Parkinson’s disease could soon be heading to an FDA review to expand the use of the drug to dementia patients.

On Monday, Acadia (NASDAQ: ACAD) reported that its drug, pimavanserin, met the goal of delaying relapse of psychosis in dementia patients compared to a placebo. Based on the results, the San Diego company said it would end the study early and seek a meeting with the regulator to discuss filing next year for approval in dementia-related psychosis.

Pimavanserin was approved in 2016 as a treatment for psychosis associated with Parkinson’s disease. Sold as Nuplazid, the drug generated $223.8 million in revenue in 2018. This summer, with second-quarter net sales for the drug totaling $83.2 million, about 46 percent more than the same quarter in 2018, Acadia updated its net sales guidance for 2019 to $320 million to $330 million. As was the case with Parkinson’s prior to the Nuplazid approval, there is currently no FDA-approved drug for the treatment of psychosis in patients who have dementia.

SVBLeerink analyst Marc Goodman said in a research note that the early end to the trial “suggests that efficacy is strong,” adding that Acadia didn’t provide much “granular detail” on a conference call about the trial Monday. The company says it plans to spell out the results at a future medical meeting. Results of the study weren’t expected until next year.

Patients with a range of dementias, including cognitive impairment associated with Alzheimer’s disease, Parkinson’s disease, and frontotemporal degeneration disorders, as well as dementia with Lewy bodies and vascular dementia, were enrolled in the Phase 3 clinical trial evaluating the drug in dementia-related psychosis. For the purposes of the study, relapse was defined as hospitalization due to dementia-related psychosis, deterioration of symptoms according to clinical scales, withdrawal from the study due to lack of efficacy, or the use of anti-psychotic medications to treat hallucinations.

Stifel analyst Paul Matteis wrote in a research note that his firm was “overly skeptical” about pimavanserin being able to show success when it reported preliminary Phase 3 data, but he added that the drug is “undoubtedly effective in preventing the relapse of psychosis in patients who initially responded to the medicine.” He raised his firm’s target price for the company from $28 apiece to $39 per share. The company could see a significant increase in the drug’s sales potential, given the number of people with dementia-related psychosis—a much larger market than Parkinson’s disease-related psychosis, Matteis wrote, albeit one in which there are also more potential generic alternative treatments.

About 1.2 million people in the US have been diagnosed with dementia-related psychosis, Acadia says. But studies suggest about 30 percent of the roughly 8 million people in the US who have dementia experience the delusions and hallucinations characteristic of the condition, the company says.

Acadia’s stock price, which closed at $23.80 per share on Friday, ended Monday at nearly $39 apiece, up 63 percent on the news.

Acadia believes pimavanserin has potential to become a treatment for a range of conditions, but not all of its studies of the drug to date have proven successful. In July, it failed a Phase 3 trial testing it as a potential complementary, or adjunctive, treatment for schizophrenia patients who haven’t fully responded to existing therapies. Another study, which is testing its efficacy as an adjunctive treatment for people with schizophrenia who exhibit a flat affect or other characteristics of a seeming lack of interest in the world—known as “negative” symptoms—is ongoing. The drug is also in late-stage testing as an adjunctive treatment for patients with major depressive disorder.