Deutsche Bank lifts Acadia stock rating, target to $35 on Nuplazid outlook

On Wednesday, Deutsche Bank (ETR:DBKGn) upgraded Acadia Pharmaceuticals (NASDAQ:ACAD) stock from Hold to Buy, setting a new price target of $35, a significant increase from the previous $20. The upgrade comes amid strong market momentum, with the stock showing impressive returns of 26.4% in the past week and 34% over the last six months. According to InvestingPro data, the company’s robust financial health score of 3.82 (rated as EXCELLENT) supports this positive outlook. The upgrade follows a favorable patent litigation outcome for their drug Nuplazid (pimavanserin), which is now expected to have patent protection until 2038. The analyst at Deutsche Bank, David Hoang, highlighted that this development establishes a more robust valuation basis for the company’s shares.

The recent intellectual property victory against generic manufacturers, including Aurobindo, has provided clearer projections for Nuplazid’s revenue stream beyond the current commercialization exclusivity period ending in 2030. This development is particularly significant given Acadia’s strong financial position, with InvestingPro analysis showing the company holds more cash than debt and maintains a healthy current ratio of 2.88, indicating solid liquidity to support its growth initiatives. This has prompted Deutsche Bank to revise their long-term financial forecasts for Acadia, adding $9 per share to the company’s valuation. The bank expressed increased confidence in the sustainability of the Nuplazid franchise and the expected continuity of Daybue’s patient retention rates.

Additionally, the anticipation of Phase 3 clinical trial data for Acadia’s Prader Willi syndrome (PWS) treatment, ACP-101, is set for early fourth quarter of 2025. Despite previous trial setbacks and an unusual inverse dose response, the market opportunity for ACP-101 is considered significant if successful, with potential peak sales estimated at $1.1 billion. Deutsche Bank has factored in this potential, albeit with a modest 20% probability of success, adding another $6 per share to Acadia’s valuation.

The analyst also pointed out that the risk-reward profile for Acadia’s stock is favorable, with a potential upside of 45-50% if the PWS treatment meets its primary endpoint, compared to a 10-15% downside if it does not. The new CEO, Catherine Owen Adams, who took the helm in September 2024, has been credited with improving the company’s narrative and investment appeal.

Looking forward, Deutsche Bank expects a series of clinical data catalysts over the next 12-18 months to potentially drive Acadia’s stock value. These include the PWS trial results, data from the ADP trial in mid-2026, and other developments to be discussed at the company’s first R&D Day on June 25, 2025.

In other recent news, Acadia Pharmaceuticals has made significant strides with its recent developments. The company reported securing a new lease for office space in Princeton, New Jersey, intended for executive offices and research and development, with a term of over 12 years. In legal matters, Acadia emerged victorious in a patent infringement lawsuit, ensuring the protection of its drug, Nuplazid, until 2038. This court ruling was acknowledged by several analyst firms, prompting BMO Capital Markets to raise its price target for Acadia to $28, citing the strengthened intellectual property protection as a positive influence on the company’s financial outlook.

Morgan Stanley (NYSE:MS) also adjusted its price target to $24, maintaining an Equalweight rating, while H.C. Wainwright increased its target to $32, emphasizing the commercial prospects for Nuplazid following the court’s decision. RBC Capital Markets maintained an Outperform rating with a $26 target, highlighting Acadia’s accelerated timeline for its Phase III ACP-101 program in Prader-Willi Syndrome. The anticipated results from this program are expected in the early fourth quarter of 2025, with a potential New Drug Application filing in early 2026. These developments have fostered optimism among investors, as Acadia continues to focus on expanding its pipeline and securing its market position.

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