BIOINVEST BREAKING NEWS – Special Update – ACAD – Nuplazid Receives Positive 12-2 Vote From FDA Advisory Panel – Acadia’s Nuplazid was favorably reviewed by an FDA advisory panel today. The vote was 12-2 on efficacy, 11-3 on safety, and most importantly, 12-2 on the drug’s overall risk/benefit for Parkinson’s disease psychosis (PDP). In our view, the FDA will approve Nuplazid by its PDUFA date of May 1st or even earlier. We expect that there will be a Black Box safety warning in the label given the tone of the panel – but that was not unexpected – and the fact that every other antipsychotic drug in the space also carries a Black Box warning. That being said, a black box warning should do little to limit sales in this large population. Other indications, such as Alzheimer’s disease psychosis are also being investigated and taken together, Nuplazid may very well be biotech’s next blockbuster drug.
After a series of negative news in biotech – clinical and regulatory – the positive ACAD review is another example of unexpected good industry news (e.g., ACAD short interest was at it highest until today with 17 million shares short). With a positive FDA panel in the pocket, ACAD is catalyst and cash rich going forward (~$500 million in the bank), with an FDA approval coming soon and an EMA filing to follow shortly thereafter. With the good news, the potential takeover opportunity and takeout value of ACAD also grows as well.
ACAD is a BUY under 40 with a TARGET PRICE of 55.