Forbes: Double Dose Of Good News For Acadia
Evelyn M. Rusli, 03.19.07, 6:25 PM ET
Shares of Acadia Pharmaceuticals doubled on Monday after the drug maker announced that its schizophrenia treatment showed effectiveness in Phase II trials.
When combined with other antipsychotic treatments, the company said, its drug, labeled ACP-103, showed a statistically significant level of efficacy and reduced negative side effects.
Current schizophrenia treatments are limited by serious side effects, such as weight gain, which prevents many patients from taking the drugs for a prolonged period. Acadia hopes that its co-therapy treatment will allow patients to take reduced dosages of antipsychotic drugs over an extended period of time, thereby reducing side effects and increasing efficacy.
"While achieving effective antipsychotic treatment comparable to a standard dose of risperidone, ACP-103 when added to a three-fold lower dose of risperidone provided substantial advantages, including a faster onset of antipsychotic action and 50% less weight gain," Uli Hacksell, chief executive officer of Acadia, said in a company statement on Monday. Risperidone is an anti-psychotic drug made by a subsidiary of Johnson & Johnson (nyse: JNJ - news - people ).
Acadia shares rose 103.44%, or $6.92, to close at $13.61 at the end of Monday trading.
"This has been the critical catalyst--the data event we've been waiting for," Jose Pantginis, vice president of equity research for Canaccord Adams, said Monday. "It is a very important catalyst to deliver a global partner." Pantginis has a $25 price target on Acadia shares.
Meanwhile, other analysts treaded more cautiously, hesitant to read too much into the mid-stage trial results. "I just think Phase III will be a much higher hurdle, and today's results don't give me enough confidence that the drug will succeed in the next trial," Jonathan Aschoff, the senior biotechnology analyst for Brean Murray, Carret & Co., said in an interview on Monday. Aschoff, who recently downgraded Acadia from "buy" to "hold," said the market overreacted today and warned investors to wait until the company released further results.
AtheroGenics (nasdaq: AGIX - news - people ), a drugmaker that saw two-thirds of its market value wiped out on Monday after its lead heart disease drug failed its Phase III clinical trial, could foreshadow Acadia's fate. AtheroGenics shares were down 60.54%, or $4.74, to $3.09 at the end of Monday trading.
As a boutique pharmaceutical outfit, Acadia is in need of a major global partner to capitalize on the estimated $14 billion antipsychotics drug market. The company is expected to release its full results later this year, which "could lead to an even stronger bargaining chip for Acadia," Pantginis said. With the success of ACP-103, Acadia would be poised to piggyback on the success of major pharmaceutical players, such as Eli Lilly (nyse: LLY - news - people ), whose antipsychotic drug, Zyprexa, pulls in about $4.2 billion in annual sales.
"Acadia is such a small company that even if it gets a sliver of that $13 to $14 billion pie, the impact to its bottom line would be huge," Pantginis said. |
