On Tuesday, BofA Securities revised its share price target for Acadia Pharmaceuticals (NASDAQ:ACAD), decreasing it to $30.00 from the previous $33.00, while sustaining a Neutral stance on the stock. The adjustment follows the announcement that Acadia's phase 3 ADVANCE-2 trial, which was testing pimavanserin for the treatment of negative symptoms of schizophrenia (NSS), failed to achieve its primary endpoint.
The trial's results at week 26 showed a change from baseline on the negative symptom assessment-16 (NSA-16) total score of -11.8 in the pimavanserin group compared to -11.1 for the placebo group, with a p-value of 0.4825. Acadia has indicated that it does not intend to pursue any further clinical trials with pimavanserin.
The bank's analysts pointed out that the NSS indication has historically been challenging to address with treatments, and the outcome of the ADVANCE-2 trial was not unexpected. The analysts had not assigned standalone value to the program due to low expectations from key opinion leaders for the trial readout.
The focus for Acadia Pharmaceuticals now shifts to the commercial performance of Daybue in Rett syndrome. In the updated discounted cash flow (DCF) model, the pipeline value has been reduced to $1 billion from the previous $1.4 billion. This valuation includes ongoing research for ACP-204 in Alzheimer’s disease psychosis and ACP-101 in Prader-Willi syndrome, both of which are in advanced trial phases.
The revised price objective of $30 reflects the updated valuation in light of the recent developments in Acadia's clinical pipeline. Despite the setback in the NSS program, BofA Securities maintains its Neutral rating on the stock.
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