ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) shares are shooting up almost 17% with investors clearly paying keen attention to the biotech firm’s Parkinson’s Disease Psychosis (PDP) drug Nuplazid’s remarkable launch strides forward.
Our analyst praises Acadia’s stellar execution on the drug’s launch- a drug that brought in quite an exciting beat this quarter, and with metrics favorable to continued momentum in the PDP indication, she is increasingly bullish on Acadia’s prospects for success.
Therefore, the analyst reiterates an Outperform rating on shares of ACAD while hiking the price target from $42 to $46, which implies a 33% upside from current levels. For the second quarter, Nuplazid amassed $30.5 million in revenue, topping consensus of $20.0 million as well as the analyst’s forecast of $20.9 million. Notably, the revenue takes under account a one-time $3.6 million recognition from the sell-through to sell-in accounting method turnover, which would mean the true second-quarter sell-in revenues hit $26.9 million in fact- quite an “impressive” 60% surge from the first quarter that realized $16.8 million.
A key element of the quarter is the ACAD team has set forth its first outlook in the Nuplazid launch, calling for 2017 revenues between $105 and $115 million, which the analyst deems “conservative” at that. In reaction, the analyst has raised her forecasts to factor in this new guidance, boosting her revenue expectations for the year to $118 million.
Our analyst notes, “ACAD reported 2Q17 financials today including a solid Nuplazid beat and first revenue guidance of $105-115MM. We see solid progress on supportive metrics for the launch and continue to see growth in PDP. We see the next major catalyst for ACAD as the full Ph2 ADP data at CTAD on Nov 1 and look forward to more clarity on the Ph3 ADP trial design and its initiation in the next few months.” Overall, “ACAD has made impressive progress in the Nuplazid launch, reflected by full Medicare coverage and >94% commercial coverage as well as an increase in targeted physicians considering Nuplazid their first-line pharmacological choice in PDP (from 18% to 30%, and to 33% in movement disorder specialists). Importantly, the 25 long-term care reps added in Q2 led to an expansion of the LTC contribution (including the VA and TRICARE) to the Nuplazid revenue (25% vs. original estimate of 20%),” surmises the analyst.
Acadia’s net loss for the quarter hit $67.4 million. The biotech firm closed the quarter with $417.3 million in cash, which our analyst anticipates will provide enough financial roadway to fuel operations through 2019.