JPMorgan upgraded ACADIA Pharmaceuticals Inc (NASDAQ:ACAD) to Overweight from Neutral and raised its price target to $32.00 from $29.00. As a result, shares jumped more than 7% intra-day today.
The stock saw an approximately 35% decline from summer peaks amid recent legal battles related to Nuplazid's composition of matter (COM) patents. While acknowledging uncertainties will linger until resolution, analysts at JPMorgan noted that their “model reflects loss of exclusivity (LOE) in 4Q30 based on what we see as a winnable case, for now”.
Even under an early-2028 Loss of Exclusivity (LOE) for Nuplazid, the worst-case scenario according to conversations with Acadia, the analysts' DCF would only see a roughly $6 decrease and still reflect some upside to the current valuation.
“In time, and perhaps as soon as the coming weeks, we suspect the focus of the stock to return to launch execution, particularly around Daybue’s 3Q print, as well as 4Q guidance,” commented the analysts at JPMorgan.
According to the firm, Acadia continues to hint at a successful launch, suggesting that existing sell-side estimates might underestimate the franchise's progress for the rest of 2023 and beyond. Consequently, the 2023 Daybue forecast is upped to $190 million from the previous $142M.