piper 8/05:
* Yesterday, August 10, after the close, ACADIA reported 2Q:05 revenues of
$2.5 million, slightly higher than our $2.3 million estimate. Due to higher
than expected revenues from Allergan and Sepracor, ex-potential milestone
payments, we now look for total revenues to reach $9.8 million in 2005.
* ACADIA continues to invest R&D prudently to advance its clinical pipeline.
2Q:05 R&D expenses of $6.5 million were below our $7 million budget. We are
reducing our forecast and look for R&D expenses of $28.2 million for the
year.
* ACADIA lost $6.0 million or ($0.26) per share in 2Q:05, ($0.02) better than
our ($0.28) estimate. We now look for ACADIA to lose $25.8 million or
($1.17) per share in 2005, compared to our prior ($1.29) per share
forecast.
* In 1H:05, ACADIA has been very active in strengthening the balance sheet.
The company raised ~$44 million and now retains a cash position of $67
million or $2.93 per share, which should last through mid-2007. ACADIA will
also receive an additional $10 million in January 2006, on the one-year
anniversary of the Sepracor alliance.
* In 2H:05, ACADIA will likely have significant clinical data releases, and
we recommend purchase of shares ahead of these events.
* The June interim analysis of Phase II data on ACP-103 in Parkinson's
disease increased our confidence in a successful outcome. We expect this
trial to complete later this year with full data available late this year
or early 2006. If all goes well, we believe this program could advance into
Phase III trials next year.
* We look for Phase II data on ACP-103 as adjunctive therapy in schizophrenia
in 2H:05. ACADIA has initiated a larger 400-patient trial with other
antipsychotic agents. Recruitment is on-going in the U.S. and will begin
shortly in Brazil. Look for an interim analysis for this trial in 2006.
* Lastly, ACADIA should also present interim Phase II data on ACP-104 (the
major metabolite of clozapine) as a stand-alone therapy for the treatment
of schizophrenia and begin a larger trial assessing cognitive benefits in
schizophrenics by year-end.
From To Price: $8.69
Changes (Previous) (Current)
52 Week High: $9.80
Rating -- Outperform
52 Week Low: $5.00
Price Tgt -- $13.00
Price Target: $13.00
Shares Out (mil): 23.5
Market Cap. (mil): $204.2
Avg Daily Vol (000): 60
Book Value/Share: $2.60
Cash Per Share: $2.93
Est LT EPS Growth: NM
P/E to LT EPS Growth (FY06): NA
Est Next Rep Date: 11/16/2005
Fiscal Year End: Dec
INVESTMENT RECOMMENDATION:
We reiterate our Outperform rating and $13 per share price target based on a
projected enterprise value of $250 million. ACADIA expects to have
significant clinical data releases in 2H:05, and we recommend purchase of
shares ahead of these events.
RISKS TO ACHIEVEMENT OF TARGET PRICE:
Risks associated with shares of ACAD are common to all drug discovery
companies, including developmental, clinical and regulatory. Drug candidates
could fail in the clinic, ACADIA may not enter into new collaborations or
achieve milestones in existing alliances. The company may require future
capital funding and may face future unforeseen litigation.
COMPANY DESCRIPTION:
ACADIA Pharmaceuticals is a biopharmaceutical company developing novel small-
molecule drugs to treat CNS disorders. The company's 3 lead Phase II drugs
are ACP-103 for treatment-induced side-effects in Parkinson's Disease and
schizophrenia and ACP-104 for schizophrenia. ACADIA has partnerships with
Allergan and Sepracor. |
