Acadia: Scope Of Company Goes Beyond Recent SAN711 Licensing Deal For ET

Summary:

• NUPLAZID and DAYBUE are each delivering double-digit percentage net product sales growth.
• Company is on track to reach more than $1 billion in annualized net product sales in 2025.
• Next phase of growth could come from two late-stage assets known as ACP-101 for hyperphagia of PWS and ACP-204 for Alzheimer’s Disease Psychosis.
• Company entered into a worldwide license agreement with Saniona to develop and commercialize SAN711 for the treatment of patients with Essential Tremor; Phase 2 study to be initiated in 2026.

Acadia Pharmaceuticals (NASDAQ:ACAD) just today announced that it had entered into a license agreement with Saniona (OMX:SANION) to develop and commercialize selective GABAA-a3 positive allosteric modulator for the treatment of patients with essential tremor [ET]. A phase 2 study using this drug to treat these patients is expected to be initiated in 2026. However, I believe that the scope of this biotech is worth a buy on the premise of its entire pipeline. There are two key points here on why I believe this to be the case. The first reason has to do with increasing sales of both its regulatory approved drugs NUPLAZID for Parkinson’s Disease [PD] psychosis and then DAYBUE for Rett Syndrome [RS].

More about this below, but it is well on track to reach more than $1 billion in annualized sales in 2025. The second reason is because it is already in the process of advancing two clinical candidates in late-stage studies. There is ACP-101 for the treatment of patients with Prader-Willi Syndrome [PWS] and then ACP-204 for Alzheimer’s Disease [AD] psychosis. With a continued increase of sales of its two regulatory approved drugs for PD and RS, along with huge potential for several other drugs established from its pipeline, I believe that investors could benefit with any potential gains made here.

ACP-101 & ACP-204 Are Additional Pipeline Aspects Worth Evaluating

A good thing about Acadia Pharmaceuticals is that its scope goes beyond that of only the drugs it has received regulatory approval for. Matter of fact, it has two late-stage assets, which if successful, are also likely to add further growth for the company. The first candidate of which involves the use of ACP-101 for the treatment of patients with hyperphagia of Prader Willi Syndrome. The second candidate of which would be the use of ACP-204 for the treatment of patients with Alzheimer’s Disease Psychosis. There is a huge opportunity for both of these pipeline products and thus, I believe it is important to go over each of them.

In terms of the first asset ACP-101 for the treatment of patients with Prader-Willi Syndrome, it is currently being evaluated in the ongoing phase 3 COMPASSPWS trial. This candidate is a nasal spray formulation of carbetocin, which is being deployed to help these patients. Before going over this particular late-stage trial, it is first important to note what this disorder is and what the possible market opportunity for it could be. Prader-Willi Syndrome [PWS] is a genetic disorder that affects multiple aspects of a persons’ body. It can affect the muscles, feeding habit, growth and intellectual processing that is needed. The worse part of all about this disorder would be something known as hyperphagia. Why is that? That’s because PWS patients heavily suffer from hyperphagia, which is constant hunger. Thus, the unintended consequence of such hunger would be it to leading to obesity and Type 2 Diabetes [T2D]. Some symptoms that these patients with PWS experience are as follows:

• Constant hunger [as noted above hyperphagia]
• Intellectual disability
• Short stature [Due to growth hormone problems]
• Delayed puberty

The Prader-Willi Syndrome market in the 7 major markets back in 2022 was said to be $834 million, with a steady growth rate until 2032. Should Acadia do well here, it would be inclined to capture a huge chunk of this market. How so? Well, it all has to do with the exact population of PWS patients it is going after, which is the hyperphagia component. Speaking of which, there are no FDA approved drugs for these patients with PWS.

In order to see if the intranasal carbetocin is going to be effective in being able to treat these patients with Prader-Willi Syndrome [PWS] it deployed the phase 3 COMPASSPWS study. This particular trial is expected to recruit up to a total of 170 patients who are to be treated over a 12-week period. The patients of this late-stage study are going to be randomized to receive either of the following doses Three-times per day [TID]:

• 3.2 mg of ACP-101
• Placebo

The primary endpoint of this study is going to be the change from baseline to week 12 between ACP-101 versus placebo with respect to a caregiver-rated score known as Hyperphagia Questionnaire for Clinical Trials [HQ-CT]. Why is this an important score? That’s because it measures the severity of hyperphagia or the constant hunger that is observed with these patients. The higher the score that is attained, the worse off in disease the patient is. However, there is no room for error, because this score is not assessed by the patient themself, instead it is a caregiver that is responsible for going through each of the questions being asked.

A little back story is that the 3.2 mg dose of ACP-101 for PWS was tested beforehand, but privately held Levo Therapeutics had its regulatory application rejected. The primary endpoint was not met, but it had hoped that it would still be approved. The FDA, thus then requested it to run another phase 3 study. If this is the case, then why is this worth a shot at evaluating again? That’s because Acadia is taking the deficiencies noted by the FDA and working to fix them to address its concerns. Not only that, but there are several changes to possibly increase the odds of success for it, although not guaranteed:

• Increased length of study
• Increased number of patients
• Changing the primary endpoint

The last one of “changing the primary endpoint” being the most important. A major problem with Levo’s phase 3 study is that is used two primary endpoints that needed to be achieved. This time around, Acadia has designed the study in mind to only incorporate one primary endpoint.

The second late-stage candidate to go over would be the use of ACP-204, which is being developed in the ongoing phase 2/3 study for the treatment of patients with Alzheimer’s Disease Psychosis. Alzheimer’s Disease [AD] is a type of disorder characterized as a decline in memory, thinking and learning. It is the most common form of dementia that exists. There are two major problems with this disorder. They are the fact that patients are unable to carry out daily tasks and also experience a huge decline over time. There are several symptoms that these patients with AD experience and they are as follows:

• Memory loss
• Inability to think properly
• Hard to make correct decisions
• Changes in behavior
• Unable to complete daily activities

The global Alzheimer’s drugs market size is projected to grow to $5.21 billion by 2030. This is a very large market opportunity in of itself, but it is important to note that the company is specifically going after a certain patient population. It is going after Alzheimer’s Disease patients with psychosis. The current phase 2/3 study deployed is expected to recruit up to 318 patients who are to be randomized 1:1:1 to receive one of the following doses:

• 30 mg of ACP-204
• 60 mg of ACP-204
• Placebo

It is important to note that what I noted above is Substudy 1 [phase 2], and then the two independent identical phase 3 studies are Substudies 2A and 2B respectively. In essence, the two late-stage trials are going to mirror that of Substudy 1 from the phase 2/3 study. The primary endpoint is going to be the total score change from baseline between ACP-204 versus placebo with respect to the Scale for the Assessment of Positive Symptoms-Hallucinations and Delusions subscales [SAPS-H+D] over a 6-week period. This SAPS-H+D is used to assess Hallucinations and delusions that may be experience by these patients. There are 7 item Hallucinations scores and then 13 delusions item scores. The higher the score present, the greater the psychosis that they might have. The company has another chance at targeting this indication with ACP-204. That’s because its prior product pimavanserin wasn’t highly ideal. Having said that, it is able to now potentially achieve 2X 34 mg equivalent of pimavanserin for starters. Along with the Pharmacokinetic [PK] profile of ACP-204 being established at 5 days compared to its counterpart. Plus, the ability to improve upon the safety profile as well, with no sign of QT prolongation either.

Financials

According to the 10-Q SEC Filing, Acadia Pharmaceuticals had cash, cash equivalents and investment securities of $565.3 million as of September 30th of 2024. The company should have enough cash on hand and this is primarily because of what is stated in its 10-Q SEC Filing. It notes that it believes it has enough cash on hand to fund its operations through and beyond the next 12 months. It might choose to raise cash earlier than expected, but for the time being it has plenty of cash on hand to fund itself. Especially, when you consider that this company is already generating revenues with the two regulatory approved drugs I noted above, which are NUPLAZID AND DAYBUE. It is on its path to obtaining more than $1 billion in annualized sales in 2025.

Again, the premise of this is because of its continued growth each and every quarter. It reported Q3 of 2024 total revenues of $250.4 million, which was a year-over-year increase of 18%. This was thanks to the two marketed drugs by the company noted directly above. Speaking of which, both grew at a double-digit growth rate. Consider that Q3 of 2024 net product sales of NUPLAZID reached $159.2 million, which was a year-over-year growth of 10%. Then, the other marketed drug DAYBUE reached net product sales of $91.2 million during the same quarter, which was a year-over-year growth of 36%. The company burns roughly $199.9 million of cash per quarter. This is broken down into SG&A expenses of $133.3 million and then R&D expenses of $66.6 million.

Risks To Business

There are several risks that investors should be aware of before investing in Acadia Pharmaceuticals. The first risk to consider would be in terms of ongoing sales of NUPLAZID and DAYBUE. The projection is that that the company could reach annualized sales of greater than $1 billion in 2025. Plus, the current net product growth sales for each are set at 10% and 36% year-over-year respectively. The risk here is that there is no assurance that the $1 billion annualized sales projection will be reached as expected. Nor, that one or both of these approved drugs are going to continue to grow at the same or higher double-digit rate shown thus far.

The second risk to consider would be the development of ACP-101, which is being evaluated in the ongoing phase 3 study for the treatment of patients with Hyperphagia of Prader-Willi Syndrome. The risk here is that the 3.2 mg dose of this drug failed in prior phase 3 study that was done by Levo Therapeutics. In addition, with it failing to achieve marketing approval of it either. The hope is that with Acadia making several changes to the trial design, that it will allow the primary endpoint to be met with statistical significance. There is no assurance that this study using ACP-101 for the treatment of these hyperphagia of Prader-Willi Syndrome patients will be successful, nor that the FDA is going to end up approving this drug for these patients.

The third and final risk to consider would be in terms of the development of ACP-204 for the treatment of patients Alzheimer’s’ Disease [AD] Psychosis. That’s because the drug is currently being explored in an ongoing phase 2/3 study using this drug to treat these patients. Not only that, but there are going to be two identical phase 3 trials to be deployed to test this drug out for these patients. The risk here is that there is no assurance that positive results are going to be achieved from Substudy 1 of the phase 2/3 study. The second risk to consider here is that there is no assurance that one or both of these phase 3 studies are going to end up having the primary endpoint met with statistical significance.

Conclusion

The final conclusion is that Acadia Pharmaceuticals has done well to advance the two late-stage clinical products from its pipeline. These would be with respect to the use of ACP-101 for the treatment of patients with hyperphagia of Prader-Willi Syndrome and ACP-204 for the targeting of patients with Alzheimer’s Disease Psychosis. As I have shown above, net product sales of NUPLAZID and DAYBUE continue to grow at a double-digit percentage rate. This in essence, goes to the notion of its target goal of being able to achieve annualized sales greater than $1 billion by 2025. There is another added clinical product added to its pipeline as well, which is SAN711 for the treatment of patients with Essential Tremor [ET]. The reason why it now has this product is because of a licensing agreement it made with Saniona, whereby it could develop and commercialize this GABAA-a3 positive allosteric modulator for the treatment of these specific patients. A phase 2 study for this ET treatment program is expected to be initiated in 2026.

---

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

---

This article is published by Terry Chrisomalis, who runs the Biotech Analysis Central pharmaceutical service on Seeking Alpha Marketplace. If you like what you read here and would like to subscribe to, I’m currently offering a two-week free trial period for subscribers to take advantage of. My service offers a deep-dive analysis of many pharmaceutical companies. The Biotech Analysis Central SA marketplace is $49 per month, but for those who sign up for the yearly plan will be able to take advantage of a 33.50% discount price of $399 per year.