A month has gone by since the last earnings report for Acadia Pharmaceuticals (ACAD). Shares have added about 3.5% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Acadia due for a pullback? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Acadia’s Q3 Loss Narrower Than Expected, Revenues Miss
Acadia reported a third-quarter 2022 loss of 17 cents per share, narrower than the Zacks Consensus Estimate of a loss of 18 cents. The loss was wider than our estimate of a loss of 16 cents per share. In the year-ago quarter, the company incurred a loss of 9 cents per share.
Total revenues, comprising net sales of Acadia’s only marketed drug, Nuplazid, decreased 1% year over year to $130.7 million in the third quarter, missing the Zacks Consensus Estimate of $140 million. Nuplazid sales decreased 2.9% sequentially in the third quarter.
Nuplazid sales in the third quarter were driven by sequential demand growth of 2% and growth acceleration in the long-term care channel, which was offset by a reduction of in-channel inventory of approximately $7 million.
Total revenues were also lower than our estimate of $139 million in the reported quarter.
Quarter in Detail
Research and development (R&D) expenses in the quarter were $81.3 million, up 38.7% year over year, owing to increased costs related to pipeline development activities and a $10 million milestone payment accrued to Neuren Pharmaceuticals upon the acceptance of the trofinetide NDA filing.
Selling, general and administrative (SG&A) expenses were $78.1 million, down 4.4% year over year, owing to reduced advertising and promotional costs.
As of Sep 30, 2022, Acadia had cash, cash equivalents and investments worth $436.6 million compared with $436.4 million as of Jun 30, 2022.
2022 Guidance
Acadia tightened its guidance for Nuplazid’s sales for 2022.
The company now expects Nuplazid’s net sales for 2022 in the $510-$520 million range compared with the earlier projection of $510-$540 million. The Zacks Consensus Estimate for the metric is pegged at $533.3 million.
The company now expects R&D expenses in the range of $345-$355 million compared with the $340-$360 million range expected previously. SG&A expenses are now expected to be $365-$375 million compared with $360-$380 million expected earlier.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -26.61% due to these changes.
VGM Scores
At this time, Acadia has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren’t focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Acadia has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Acadia belongs to the Zacks Medical – Biomedical and Genetics industry. Another stock from the same industry, Blueprint Medicines (BPMC), has gained 8% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.
Blueprint Medicines reported revenues of $65.98 million in the last reported quarter, representing a year-over-year change of +172.8%. EPS of -$2.23 for the same period compares with -$2 a year ago.
For the current quarter, Blueprint Medicines is expected to post a loss of $2.67 per share, indicating a change of -169.7% from the year-ago quarter. The Zacks Consensus Estimate has changed -4.3% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Blueprint Medicines. Also, the stock has a VGM Score of F.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
