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Investing.com - RBC Capital raised its price target on Acadia Pharmaceuticals (NASDAQ:ACAD) to $38.00 from $26.00 on Monday, while maintaining an Outperform rating on the stock. The company, currently trading at $22.30 with a market cap of $3.73 billion, has demonstrated strong momentum with a 48% return over the past year.
The firm views Acadia as a "solid commercial-stage story with an emerging pipeline," highlighting a recent Nuplazid intellectual property win that provides "a high likelihood of cash flow sustainability." InvestingPro data supports this view, showing the company holds more cash than debt and maintains a healthy current ratio of 2.88.
RBC Capital noted commercial tailwinds suggesting continued growth for Nuplazid and stabilization prospects for Daybue, strengthening the company’s market position.
The firm acknowledged some complexity in Acadia’s outlook, including "maturing commercial franchises, exposure to macro/policy issues (IRA, MFN), and higher risk to the next pipeline catalyst."
Despite these challenges, RBC Capital considers the stock "fundamentally undervalued" at its current market capitalization below $4 billion, with annual revenue from existing products now likely sustainable "well into the next decade" and potential upside from pipeline contributions. This assessment aligns with InvestingPro’s Fair Value calculations, which indicate the stock is currently undervalued.
In other recent news, Acadia Pharmaceuticals has successfully defended its patent rights for the drug NUPLAZID, with the U.S. Court of Appeals affirming a lower court’s decision that secures patent protection through 2030. This legal victory is crucial for maintaining the exclusivity of NUPLAZID, a treatment for Parkinson’s disease psychosis, and allows Acadia to continue capitalizing on its research and development efforts without immediate generic competition. Following this favorable outcome, JPMorgan raised its price target for Acadia Pharmaceuticals to $30, maintaining an Overweight rating. The firm cited confidence in Acadia’s legal standing and extended the Nuplazid loss of exclusivity assumption to 2038. In other developments, Cantor Fitzgerald reiterated its Overweight rating on Acadia, highlighting growth strategies for its Daybue medication, including a 30% expansion of its field force and focusing on managing side effects. Meanwhile, Macquarie initiated coverage on Neuren Pharmaceuticals with an outperform rating, emphasizing Neuren’s partnership with Acadia and the potential of its pipeline product, NNZ-2591. These recent developments underscore the strategic moves and legal victories shaping the landscape for Acadia and its partners.
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