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Investing.com - Acadia Pharmaceuticals (NASDAQ:ACAD) stock fell approximately 11% Wednesday following news that its ACP-101 drug candidate missed its primary endpoint in clinical trials. The company, which maintains a strong financial position with a "GREAT" health score according to InvestingPro analysis, saw its shares drop despite holding more cash than debt on its balance sheet.
The decline of about $2.50 per share exceeded the expected impact, as Leerink Partners had anticipated no more than $2 per share was priced in for this program. The pharmaceutical company’s shares underperformed compared to the broader biotech sector, with the XBI index rising 1% on the same day. Despite the recent decline, InvestingPro data shows the stock remains up nearly 37% over the past six months, with analysts maintaining an average price target above current levels.
Leerink Partners maintained its Outperform rating and $32.00 price target on Acadia despite the disappointing trial results. The research firm noted it had "low expectations going into the readout," particularly since ACP-101 had previously failed in one Phase 3 trial and showed mixed results in earlier studies. The company’s solid fundamentals, including a healthy current ratio of 2.91 and strong revenue growth of 14.4% in the last twelve months, support the positive analyst outlook. For deeper insights into Acadia’s financial health and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro.
The firm expressed continued confidence in Acadia’s base business performance and suggested the current stock price assigns "minimal, if any, value for the pipeline." Leerink’s analysis indicates the market has largely discounted Acadia’s development portfolio at current levels. This view aligns with the company’s solid financial metrics, including a gross profit margin of 60.2% and positive earnings of $1.33 per share over the last twelve months.
Leerink Partners expressed greater optimism about Acadia’s next major pipeline candidate, ACP-204, a second-generation version of Nuplazid that acts as a 5HT-2A inverse agonist. This drug is being developed for Alzheimer’s disease psychosis, with data expected in mid-2026. The company’s strong balance sheet, with minimal debt-to-equity ratio of 0.07, positions it well to continue advancing its development pipeline.
In other recent news, Acadia Pharmaceuticals announced that its Phase 3 COMPASS PWS study evaluating ACP-101 (intranasal carbetocin) in patients with Prader-Willi syndrome (PWS) did not achieve its primary endpoint. This development led the company to discontinue the drug’s development. Following the announcement, BofA Securities maintained its Neutral rating on Acadia Pharmaceuticals with a price target of $27.00. Similarly, Baird reiterated its Outperform rating on the company, setting a price target of $31.00.
The failure of Acadia’s clinical trial has impacted the competitive landscape in the PWS treatment market. Soleno Therapeutics, a competitor, saw its stock rise as Acadia exited the PWS treatment space. Wells Fargo reiterated an Overweight rating on Soleno Therapeutics, with a price target of $123.00, noting the removal of a competitive overhang. Stifel also maintained a Buy rating on Soleno Therapeutics, with a price target of $118.00, highlighting the reduced uncertainty for Soleno’s Vykat drug. These developments reflect the shifting dynamics in the PWS treatment sector.
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