Acadia Shares Rise on "Buy" Initiation
Tuesday August 15, 11:48 am ET
Acadia Pharmaceuticals Shares Get Boost From Bank of America "Buy" Coverage, Citing Pipeline
NEW YORK (AP) -- Shares of biopharmaceutical company Acadia Pharmaceuticals Inc. jumped Tuesday morning after Bank Of America initiated coverage late Monday with a "Buy" rating, citing the strength of its pipeline.
The stock gained 48 cents, or 8.7 percent, to $5.97 per share on the Nasdaq. Shares reached a 52-week low of $5.07 Aug. 10, marking a sharp drop from the 52-week high of $17.94 March 17.
Analyst David Witzke set the 12-month target price at $10 citing what he considers five promising clinical programs. Also, the stock's decline in value and present weakness have created an attractive entry point, he said. The company focuses on developing treatments for central nervous system disorders, including schizophrenia, insomnia and Parkinson's disease.
The five clinical programs focus on schizophrenia and Parkinson's treatment candidates. The markets for those treatments represent a $10 billion opportunity for the company, Witzke said in a report to investors.
"Importantly, all of Acadia's development programs were internally discovered and we note that the company has five additional preclinical discovery programs, focused on glaucoma, endocrinology, sleep, neuropsychiatry, and obesity," he said.
Milestones in the next 12 months include interim Phase II clinical trial data for the company's ACP-103 treatment, designed to prevent side effects of schizophrenia treatment. Also, the company is set to start two Phase II trials of ACP-103 for Parkinson's and sleep maintenance insomnia.
Additionally, the company plans to start a Phase IIb trial for its anti-psychotic ACP-104, aimed at treating schizophrenia. Phase II data from a partnership with Allergen on a neuropathic pain program is also expected.
Risks for the company are risks seen with many early- and mid-stage biotechnology companies. They include the early stage of development with many of its treatment candidates and the company's need for external financing, as it is currently unprofitable. Also, Witzke gives the company an "Extreme" rating for its volatility, citing the fact that it is unprofitable. |
