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Acadia (ACAD) Thrives on Nuplazid, Overdependence a Concern

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Acadia Pharmaceuticals Inc. (ACAD - Free Report) is making good progress with its sole marketed drug, Nuplazid (pimavanserin), which is approved by the FDA for treating hallucinations and delusions associated with Parkinson’s disease psychosis in the United States.

Nuplazid has witnessed a steady uptake so far. In the first six months of 2022, the drug generated sales worth $250 million, reflecting an increase of 12.7% on a year-over-year basis.

Nuplazid’s label expansion studies also look promising. However, ACAD faced a major setback when it received a complete response letter (“CRL”) from the FDA for the resubmitted supplemental new drug application (sNDA) for pimavanserin for the treatment of hallucinations and delusions associated with Alzheimer’s disease psychosis (“ADP”) in August 2022.

In June 2022, the FDA’s Psychopharmacologic Drugs Advisory Committee voted (nine-three) against the sNDA for pimavanserin for treating hallucinations and delusions associated with ADP.

The FDA first issued a CRL to the Nuplazid sNDA in April 2021.

Shares of Acadia have plunged 32% this year compared with the industry’s decrease of 28.3%.

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Meanwhile, in September 2022, the FDA accepted for review Acadia's new drug application (NDA) seeking approval of its pipeline candidate, trofinetide, for the treatment of patients with Rett syndrome, a rare neurological disorder for girls aged between five and 20 years.

With the FDA granting priority review to the NDA, a decision from the regulatory body is expected on Mar 12, 2023.

Upon potential approval, trofinetide can become the second approved drug in Acadia’s portfolio of marketed drugs and lend a significant boost to the company as well as lower its sole dependence on Nuplazid for revenues.

However, competition remains stiff as several other companies, including Axsome Therapeutics (AXSM - Free Report) , are also developing treatments to address various CNS disorders.

In August, the FDA approved Axsome’s lead pipeline candidate AXS-05, with the trade name Auvelity, for the treatment of adults with major depressive disorder.

Axsome also has several other CNS product candidates, namely AXS-07, AXS-09, AXS-12 and AXS-14, which are being developed for multiple CNS indications. A prospective approval for any of these candidates is likely to induce competition for Acadia in the days ahead.

Zacks Rank & Other Stocks to Consider

Acadia currently carries a Zacks Rank #2 (Buy). Other stocks worth considering in the biotech sector are ORIC Pharmaceuticals, Inc. (ORIC - Free Report) and Atara Biotherapeutics, Inc. (ATRA - Free Report) , both carrying the same Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ORIC Pharmaceuticals’ loss per share estimates narrowed 5.9% for 2022 and 7.3% for 2023 in the past 60 days.

Earnings of ORIC Pharmaceuticals surpassed estimates in three of the trailing four quarters and missed on the other occasion. ORIC delivered an earnings surprise of 8.85%, on average.

Atara Biotherapeutics’ loss per share estimates narrowed 21.3% for 2022 and 8.3% for 2023 in the past 60 days.

Earnings of Atara Biotherapeutics surpassed estimates in three of the trailing four quarters and missed on the other occasion. ATRA delivered an earnings surprise of 4.83%, on average.

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