Tuesday - Oppenheimer has revised its price target for Acadia Pharmaceuticals (NASDAQ:ACAD) to $19.00, down from the previous $25.00, while maintaining a Perform rating on the stock. The adjustment follows the Phase 3 ADVANCE-2 study results of pimavanserin, a treatment for schizophrenia negative symptoms (SNS), which did not meet its primary endpoint.
The ADVANCE-2 study, a well-controlled trial with 454 patients at multiple international locations, aimed to measure the change in NSA-16 score at 26 weeks. However, the results showed that pimavanserin's performance was not significantly better than the placebo, with a -11.8 point change versus -11.1 for the placebo, leading to the trial's primary endpoint being missed.
The high placebo response rate was a contributing factor to the study's outcome, which was in line with the cautious outlook previously held. As a result, Acadia Pharmaceuticals has decided to halt further development of pimavanserin for SNS. This decision has led Oppenheimer to remove the potential SNS treatment from its business model for Acadia, which is reflected in the lowered price target.
Moving forward, Acadia is expected to focus on maximizing free cash flow generation with its existing drug Nuplazid, executing the launch of Daybue, continuing trials for Alzheimer's disease psychosis (ADP) and Prader-Willi syndrome (PWS), and seeking business development deals. The company's strategy shift comes after acknowledging the challenges faced in the SNS treatment landscape, where many candidates have failed to demonstrate efficacy.
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