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Acadia (ACAD) Partners With Stoke for CNS Disorder Therapies

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Acadia Pharmaceuticals Inc. (ACAD - Free Report) announced that it has entered into a collaboration agreement with Massachusetts-based biotech Stoke Therapeutics, Inc. (STOK - Free Report) to discover, develop and commercialize novel RNA-based medicines for treating neurodevelopmental diseases of the central nervous system (“CNS”).

With this partnership, the companies are looking to leverage Stoke’s RNA-based capabilities with Acadia’s expertise in neuroscience drug development for discovering multiple RNA-based treatments in severe and rare genetic neurodevelopmental diseases, including SYNGAP1 syndrome, Rett syndrome and an undisclosed neurodevelopmental target.

Per the above agreement, Acadia will make an upfront payment of $60 million to Stoke, who will be entitled to receive up to $907 million in milestone payments as well as royalties on net sales if a product is approved from the collaboration.

Acadia and Stoke will share all costs and profits equally for the SYNGAP1 program across the world. The companies will jointly share the development and commercialization responsibilities for the same, while Stoke will receive regulatory and sales-based millstones on first commercial sales.

Stoke will lead the preclinical studies for the other two programs – Rett syndrome and an undisclosed neurodevelopmental target, while Acadia will be responsible for clinical development and commercialization activities. Acadia will solely sponsor the research and all preclinical development activities for the two programs.

Shares of Acadia have plunged 57.6% in the past year compared with the industry’s decline of 31.2%.

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We note that the above collaboration looks a good strategic fit for Acadia to boost its pipeline of candidates being developed for treating various CNS disorders.

In December 2021, the company announced positive top-line data from the phase III Lavender study that evaluated the safety and efficacy of its pipeline candidate, trofinetide, for the treatment of Rett syndrome. The study met its co-primary endpoints.

Acadia, which expects to file a new drug application (“NDA”) for trofinetide to treat Rett syndrome around mid-2022, is planning to hold a pre-NDA meeting with the FDA in the first quarter of 2022.

Acadia obtained exclusive North American rights to develop and commercialize trofinetide for Rett syndrome and other indications from Australian biopharmaceutical company, Neuren Pharmaceuticals Limited.

The FDA has granted a Rare Pediatric Disease designation to trofinetide for the treatment of Rett syndrome.

Zacks Rank & Other Stocks to Consider

Acadia currently carries a Zacks Rank #2 (Buy). Top-ranked stocks in the biotech sector include Precision BioSciences, Inc. (DTIL - Free Report) and AnaptysBio, Inc. (ANAB - Free Report) , both sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Precision BioSciences’ loss per share estimates have narrowed 20.1% for 2022, over the past 60 days.

Precision BioSciences’ earnings surpassed estimates in each of the trailing four quarters.

AnaptysBio’s loss per share estimates have narrowed 0.3% for 2022, over the past 60 days. The stock has rallied 39.4% in the past year.

AnaptysBio’s earnings surpassed estimates in three of the trailing four quarters and missed the same on the other occasion.