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Biotech / Medical : ACADIA Pharmaceuticals Inc (ACAD) -- Ignore unavailable to you. Want to Upgrade?

To: mopgcw who wrote (142)	6/14/2005 3:36:07 AM
From: mopgcw	Respond to of 588

Piper: ACAD :Revenue Surprise Due to Sepracor Partnership; Raised $34M May 12, 2005 Outperform Volatility: High Edward A. Tenthoff, Sr Research 212 284-9403, edward.a.tenthoff@pjc.com William T. Ho, Research Analyst 212 284-9308, william.t.ho@pjc.com KEY POINTS: * ACADIA reported upside revenue surprise of $2.3 million in 1Q:05 due to R&D support under the new Sepracor partnership. * We now look for total revenues to reach $9.2 million in 2005, excluding potential milestone payments from Allergan, and to decline to $6 million in 2006 after the termination of the R&D phase of the Allergan partnership in 1Q:06. * ACADIA continues to invest R&D prudently to advance its clinical pipeline. We look for R&D investment of $30 million this year and $40 million in 2006. We look for ACADIA to lose $28.6 million or ($1.29) in 2005 and $43.8 million or ($1.73) in 2006. * In April, ACADIA issued an estimated 5.3 million shares raising net proceeds of ~$34 million. Added onto ACADIA's 1Q:05 reported cash position, we estimate ACADIA retains a pro-forma cash position of $75.6 million or $3.27 per share, which should last through mid-2007. We forecast ACADIA will burn $28 million this year, within management's guidance range of $26- $30 million. * ACADIA will have significant clinical data releases in 2H:05 and we recommend purchase of shares ahead of these events. * In particular, we look for an interim look at Phase II data on ACP-103 in Parkinson's disease treatment-induced side-effects near-term with full data available by year-end or early 2006. * We also look for Phase II data on ACP-103 as adjunctive therapy in schizophrenia during 2H:05. ACADIA intends to start a larger 400-patient trial with other antipsychotic agents in 2Q:05. * Lastly, ACADIA should present 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. Price: $7.43 52 Week High: $8.40 52 Week Low: $4.95 Price Tgt -- $11.00 Proj Enterprise Value of $210M Shares Out (mil): 23.1 Market Cap. (mil): $171.6 Avg Daily Vol (000): 16 Book Value/Share: $2.87 Cash Per Share: $3.27 Est LT EPS Growth: NM P/E to LT EPS Growth (FY06): NA Est Next Rep Date: 07/13/2005 Fiscal Year End: Dec Note: pro-forma book value and cash per share include est. impact of PIPE transaction INVESTMENT RECOMMENDATION: We reiterate our Outperform rating on ACADIA with an $11 price target. We arrive at this target by projecting an enterprise value of $210 million based on 3 CNS drugs in Phase II development. ACADIA will have significant clinical data releases in 2H:05 and we recommend purchase of shares ahead of these events. RISKS TO ACHIEVEMENT OF TARGET PRICE: Among the risks associated with shares of ACAD are those typical with all drug discovery companies including developmental, clinical, and regulatory risks, particularly in CNS. ACP-103 and ACP-104 could fail in clinical trials. ACADIA may not enter into new collaborations or achieve milestones in existing alliances. The company will require additional funding. ACADIA could face future unforeseen litigation that could adversely impact business. COMPANY DESCRIPTION: ACADIA Pharmaceuticals is a biopharmaceutical company located in San Diego developing novel small-molecule drugs to treat CNS disorders. The company's lead drug is ACP-103 in Phase II trials for Parkinson's disease. ACADIA should also commence Phase II trials of ACP-103 and ACP-104 for schizophrenia soon. Partner Allergan should advance two pain drugs into the clinic this year.