Acadia shares soar after CNBC host's endorsement
By Bruce V. Bigelow
UNION-TRIBUNE STAFF WRITER
February 1, 2006
Jim Cramer has done it again.
Shares of San Diego's Acadia Pharmaceuticals surged nearly 27 percent yesterday after the host of CNBC's “Mad Money” recommended the stock based on the potential of two experimental drugs the company has in clinical trials.
In a Monday broadcast, Cramer said interim results are coming out soon from a Phase 2 clinical trial for one drug, ACP-103, that would treat Parkinson's disease. More results are due later this year.
Cramer also said another drug Acadia has in development, ACP-104, has Phase 2 results coming out later this year. He described it as a better version of Clozapine, a widely used antipsychotic drug.
In the feverish trading that ensued, Acadia's stock soared as high as $13.40 a share before settling at $13.05, an increase of $2.76 a share in Nasdaq trading of more than 9.3 million shares. That was more than 138 times Acadia's recent average daily trading volume of 67,553.
A spokeswoman for Acadia did not return a call seeking comment yesterday.
“He currently is having that kind of effect on stocks,” said Herb Greenberg of San Diego, a financial columnist for MarketWatch who appears regularly on Cramer's “Mad Money” show. “Right now, he just has a very popular pulpit and very high visibility.”
Cramer had a similar effect on Cubic Corp. last August when he commented favorably on the San Diego company's prospects.
The price of Cubic's stock spiked by 12 percent afterward, to more than $19 a share, before declining to a 52-week low of $15.64 on Oct. 20. Cubic's shares have climbed back since then; losing a penny a share yesterday to close at $22.29.
Charles C. Duncan, a San Francisco analyst who tracks Acadia for JMP Securities, described Cramer's comments as “more than a mention. It was a pretty well-developed thesis that was not inaccurate or inconsistent with our own thesis” on Acadia.
Cramer's show serves a need of sorts, Greenberg said, because, “People are always looking for things to trade. They're always looking for quick money. As with anything, though, what goes up can go down.”
In his weekly appearances on “Mad Money,” Greenberg said he serves a role as the anti-Cramer.
“He welcomes the discourse because he understands there are two sides to every trade and people need to understand why there are traders who are betting against them,” Greenberg said. “I can't stress that enough.”
Bruce Bigelow: (619) 293-1314; |
