ACADIA Surges On Early Success Of Nuplazid Dementia Study

ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) announced that Nuplazid (pimavanserin) met the primary endpoint by showing statistically significant superiority over placebo in increasing the time to relapse of dementia-related psychosis in the phase III HARMONY study. The endpoint was met during the planned interim analysis. The company has decided to stop the study following the recommendation of an independent data monitoring committee.

Notably, Nuplazid is already approved for patients with Parkinson’s disease psychosis.

Encouraging data from the study increases the probability of FDA approval for Nuplazid for a second indication, dementia-related psychosis, which led to a 63.2% rally in ACADIA’s shares on Sep 9. In fact, shares of the company have surged 140.3% so far this year against the industry’s decline of 2.5%.

Detailed data from the study will be presented at a future medical meeting. Nuplazid already enjoys Breakthrough Therapy designation for the treatment of dementia-related psychosis.

ACADIA is planning to meet with the FDA soon for discussing a possible submission of a supplemental new drug application for Nupalzid in 2020. We note that some analysts believe that encouraging data from HARMONY study increases the odds of Nuplazid’s approval for dementia-related psychosis. However, they were concerned by the fact that there is no precedent related to approval for any drug based on single late-stage relapse prevention study. Thus, uncertainty related to the regulatory path forward for Nuplazid’s approval in dementia-related psychosis persists.

The HARMONY study evaluated Nuplazid as a potential treatment for delusions and hallucinations associated with dementia-related psychosis. The study included patients with most common subtypes of dementia including Alzheimer’s disease, dementia with Lewy bodies, Parkinson’s disease dementia, vascular dementia, and frontotemporal dementia spectrum disorders. Patients were dosed with once-daily 34mg of Nuplazid for 12 weeks of stabilization period followed by 34mg or 20mg dosage of the drug or placebo for up to 26 weeks or until relapse of psychosis occurs.

The drug recorded sales of $83.2 million in the first six months of 2019, registering growth of 44.4% year over year. With no FDA-approved drug for dementia-related psychosis, a potential approval for the drug in the expanded label will further boost sales of Nuplazid. The targeted indication has an estimated 1.2 million patients in the United States.

Please note that in July Nuplazid failed in a phase III study evaluating it as an adjunctive treatment for schizophrenia patients with inadequate response to existing therapies. We note that the field related to brain disorders like dementia or others has been challenging due to the risk of adverse events. Several bigwigs like Merck (NYSE:MRK) , AstraZeneca (NYSE:AZN) , Pfizer (NYSE:PFE) and others had earlier terminated development of candidates for Alzheimer’s disease (“AD”), a type of dementia, due to failure of studies. Nonetheless, companies remain committed to develop a treatment for AD with several candidates under development in clinical studies.

Zacks Rank

ACADIA currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple (NASDAQ:AAPL) sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>