Neutral Outlook on ACADIA Pharmaceuticals Amidst Revenue Miss and Revised Penetration Forecasts

In a report released yesterday, Tazeen Ahmad from Bank of America Securities reiterated a Hold rating on ACADIA Pharmaceuticals (ACAD – Research Report), with a price target of $22.00.

Tazeen Ahmad’s rating is based on the combination of ACADIA Pharmaceuticals’ recent performance and market dynamics. ACAD’s first-quarter revenues for Daybue slightly missed the target, attributed to a lag in discontinuation rates, where the pace of patient discontinuations temporarily exceeded new patient starts. Although there has been a recent uptick in new patient adds, Ahmad remains cautious about the long-term persistence rates, which could potentially stabilize below the company’s guidance of over 50%. This caution is reflected in his conservative sales forecast for Daybue, influencing the Hold rating and a revised price objective.
Furthermore, while the penetration of Daybue in the diagnosed Rett syndrome population has reached about 25%, and Nuplazid continues to grow within the PDP market, Ahmad has adjusted the peak penetration expectations for Daybue down to 40% from 45%. This adjustment, along with updated first-quarter results, share count, and operational expenses, has led to a lower price objective from $26 to $22. These factors cumulatively contribute to Ahmad’s decision to maintain a Neutral stance on ACADIA Pharmaceuticals, indicating that while there may be positive aspects to the company’s performance, there are also significant uncertainties that warrant a cautious investment approach.

In another report released on May 8, Mizuho Securities also maintained a Hold rating on the stock with a $21.00 price target.

ACAD’s price has also changed moderately for the past six months – from $22.010 to $15.210, which is a -30.90% drop .

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ACADIA Pharmaceuticals (ACAD) Company Description:

ACADIA Pharmaceuticals, Inc. operates as a biopharmaceutical company focused on the development and commercialization of medicines to address unmet medical needs in central nervous system, or CNS, disorders. The firms product include Nuplazid, which is used for the treatment of hallucinations and delusions associated with Parkinson’s disease psychosis. The company was founded by Mark R. Brann on July 16, 1993 and is headquartered in San Diego, CA.