ACADIA Pharmaceuticals Inc. ACAD reported second-quarter 2020 loss of 27 cents per share, narrower than the Zacks Consensus Estimate of a loss of 44 cents as well as the year-ago loss of 38 cents.

Total revenues comprising net sales of the company’s sole marketed drug Nuplazid (pimavanserin) soared 32% year over year to $110.1 million in the second quarter. The top line also surpassed the Zacks Consensus Estimate of $106 million.

Notably, Nuplazid is the first and the only FDA-approved treatment of hallucinations and delusions associated with Parkinson’s disease psychosis. Per the company, sales of Nuplazid grew steadily both year over year and sequentially, driven by a strong commercial execution. The drug saw a solid uptake ever since its launch in 2016.

Research and development (R&D) expenses were $64.3 million in the quarter, down 4.4% from the year-ago period owing to lower development costs of Nuplazid for additional indications.

Selling, general and administrative (SG&A) expenses rose 23.9% year over year to $84.3 million due to increased advertising and promotional costs, and higher personnel costs.

As of Jun 30, 2020, ACADIA had cash, cash equivalents and investments worth $658.6 million compared with $651.4 million as of Mar 31, 2020.

2020 Guidance

Owing to the strong adoption of Nuplazid, ACADIA raised the lower end of its net sales guidance for the drug. The company now expects total revenues in the range of $430-$450 million for the full year, tightened from the previous guidance of $420-$450 million. The Zacks Consensus Estimate for the metric stands at $440.2 million for the period.

Shares of ACADIA were up 3.1% in pre-market trading as the company raised its net sales guidance for Nuplazid. The stock has gained 0.2% in the year so far compared with the industry’s increase of 5.8%.

Meanwhile, the R&D expenses are now expected within $265-$280 million, down from the previous guided range of $270-$285 million. SG&A expenses are projected in the band of $400-$420 million, lower than the earlier forecast of $425-$445 million.

Pipeline Updates

Several additional studies on Nuplazid targeting different central nervous system (CNS) indications are currently underway. A potential label expansion will boost the drug’s sales in the future quarters.

In June 2020, ACADIA submitted a supplemental new drug application (sNDA) to the FDA seeking an approval for Nuplazid to treat hallucinations and delusions associated with dementia-related psychosis (DRP). The sNDA was based on data from the pivotal phase III HARMONY study. Subsequently, in July, the FDA accepted the sNDA for NUPLAZID to address the given indication. The regulatory body set an action date of Apr 3, 2021. If approved, Nuplazid will get a potential second indication on its label.

Other studies on Nupalzid include the phase II ADVANCE study for addressing schizophrenia’s negative symptoms. The company recently initiated a second pivotal study, ADVANCE-2, on Nupalzid for treating negative symptoms of schizophrenia. Currently, there is no FDA-approved treatment option for the given condition.

Meanwhile, in July 2020, ACADIA announced top-line results from the phase III CLARITY study evaluating Nuplazid for the adjunctive treatment of major depressive disorder. The study did not achieve any statistical significance in relation to the primary endpoint.

Apart from Nupalzid, ACADIA is evaluating its investigational candidate trofinetide in the phase III LAVENDER study for the treatment of Rett syndrome, a rare neurodevelopmental congenital CNS disorder for girls aged between five and 20 years. Top-line outcomes from the same are expected in the second half of 2021.

Zacks Rank & Stocks to Consider

ACADIA currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the healthcare sector include Emergent BioSolutions Inc. EBS, Horizon Therapeutics Public Limited Company HZNP and Alimera Sciences, Inc. ALIM, all sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Emergent’s earnings estimates have moved 96.4% and 99.1% north for 2020 and 2021, respectively, over the past 60 days. The stock has skyrocketed 149.2% year to date.

Horizon’s earnings estimates have been revised 13% and 12.1% upward for 2020 and 2021 each over the past 60 days. The stock has rallied 111% year to date.

Alimera Sciences’ loss per share estimates have narrowed 43.8% for 2020 and 17.4% for 2021 over the past 60 days.

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