Why An ACADIA Pharmaceuticals (NASDAQ:ACAD) Stock Buyout Is Likely After Surprisingly Strong Nuplazid Sales

- August 8, 2017

ACAD stock is currently 13% higher in afterhours trading, responding to earnings from Acadia Pharmaceuticals Inc (NASDAQ:ACAD) that beat top line expectations by $10.5 million. That may not seem like a large beat, until you consider total revenue of only $30.5 million. Needless to say, Wall St was way off on Nuplazid.

Nuplazid is Acadia’s only revenue producing drug, an anti-psychotic that treats Parkinson’s disease psychosis. The drug has now been on the market for one year. 

The significant acceleration of growth from Q1 to Q2 implies that our previous theories are in part accurate.

We previously said it would take Acadia Pharmaceuticals (NASDAQ:ACAD) management one year to adjust as a commercial drug company, from a clinical stage biotech. The near 100% increase sequentially suggests that Acadia is ahead of schedule.

Second, for Nuplazid sales to appreciate so quickly it implies that our previous reports of off label usage could be correct. Acadia Pharmaceuticals (NASDAQ:ACAD) reported positive data with Nuplazid as a treatment for Alzheimer’s disease psychosis. We believed this data would open the doors for off label usage, which supported a BNL Finance source that Nuplazid was being used to treat Lewy body dementia with insurance reimbursement.

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With PDP, ADP, and Lewy body dementia, Nuplazid would essentially target the three most common neurodegenerative diseases. Furthermore, with no treatment alternatives, this means that Nuplazid would have super blockbuster potential long-term.

We believe the jump to $30.5 million in second quarter revenue suggests the positive ADP data is having a bigger effect than Wall St realizes. More importantly, we believe that big pharma must now take Acadia Pharmaceuticals and Nuplazid seriously.

According to our sources, there has been talks of partnerships and buyouts involving ACAD. With Acadia producing such a surprisingly strong quarter and CEO Steve Davis confirming that the company will start its Phase III program in the next couple of months, big pharma now has more incentive than ever to give ACAD stock owners (ie Baker Bros) what they want, a meaningful buyout offer.

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