ACADIA's Antipsychotic Drug Gets Breakthrough Therapy Status

ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) announced the initiation of a phase III study – HARMONY – for evaluating its antipsychotic drug, Nuplazid, for the treatment of hallucinations and delusions associated with dementia-related psychosis. The FDA also granted Breakthrough Therapy Designation to the drug for this indication.

The Breakthrough Therapy designation was granted to speed up the development and review of drugs that target serious or life-threatening conditions.

Nuplazid is currently approved as the only treatment for hallucinations and delusions associated with Parkinson’s disease psychosis in the United States.

ACADIA’s stock was up 7.2% in aftermarket hours on Wednesday following the news. In fact, shares of the company are up 35.7% so far this year, outperforming the industry’s rise of 14.5%.

The HARMONY study will evaluate the ability of the drug in preventing relapse of psychotic symptoms inAlzheimer’s disease, dementia with Lewy bodies, Parkinson’s disease dementia, vascular dementia and frontotemporal dementia. The above indications are the most common subtypes of dementia. The study will observe the patients over 12 weeks for dose stabilization followed by another 26 weeks for relapse of psychosis.

The phase III study is designed based on clinically meaningful and statistically significant outcomes in Phase II -019 study of the drug evaluated in patients with Alzheimer’s disease psychosis. The study administered 34mg of the drug over a period of 6 weeks.

Moreover, the Breakthrough Therapy designation was granted based on phase II -019 study as well as phase II -020 study investigating the drug in Parkinson’s disease psychosis.

Dementia-related psychosis is a serious medical condition with no approved therapy available currently. Per the press release, there are almost 8 million people suffering from dementia with 30% among them having psychosis.

The sale of Nuplazid generated $45.8 million in the first half of 2017. The broadening of the indication upon successful completion of the phase III study and a potential approval will boost sales of the drug driving the company’s revenues.

Zacks Rank & Other Stocks to Consider

ACADIA carries a Zacks Rank #2 (Buy). Other stocks worth considering in the health care sector include Adaptimmune Therapeutics PLC (NASDAQ:ADAP) , Biogen Inc. (NASDAQ:BIIB) and Aduro BioTech, Inc. (NASDAQ:ADRO) . All the stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Adaptimmune’s loss per share estimates have narrowed from $1.03 to 95 cents for 2017 and from 95 cents to 90 cents for 2018 over the last 30 days. The company pulled off positive earnings surprises in two of the trailing four quarters, with an average beat of 2.56%. The share price of the company has increased 115.8% year to date.

Biogen’s earnings per share estimates have moved up from $21.37 to $21.42 for 2017 and from $23.11 to $23.23 for 2018 over the last 30 days. The company delivered positive earnings surprises in all the trailing four quarters, with an average beat of 6.41%. The share price of the company has increased 11% year to date.

Aduro’s loss estimates per share have narrowed from $1.36 to $1.29 for 2017 over last 60 days. The company came up with positive earnings surprises in two of the trailing four quarters, with an average beat of 2.53%.

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