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On Friday, JPMorgan analysts increased the price target for Acadia Pharmaceuticals stock (NASDAQ: ACAD) to $30 from $26, maintaining an Overweight rating. The stock, currently trading at $21.34, has shown impressive momentum with a 39.5% return over the past year and maintains strong financial health with a current ratio of 2.88. According to InvestingPro analysis, the company appears undervalued based on its Fair Value calculation. The adjustment follows a favorable ruling from the U.S. District Court for the District of Delaware regarding Acadia’s 721 formulation patent for Nuplazid, which protects the 34mg capsule formulation until 2038.
The court’s decision was a positive outcome for Acadia, as it ruled in favor of the company’s patent against challenges from Aurobindo Pharma (NSE:ARBN) and other ANDA filers. The ruling is expected to be appealed, a process that could span one to two years. Meanwhile, another legal proceeding concerning the 740 composition of matter patent is scheduled for Friday at the U.S. Court of Appeals for the Federal Circuit. With revenue growing at 22.4% and an impressive return on assets of 23%, InvestingPro data shows Acadia’s strong operational performance. Get access to 10+ additional ProTips and comprehensive analysis with an InvestingPro subscription.
The 740 patent, which covers pimavanserin and its salts, is valid until 2030, including a patent term extension. Acadia’s recent 10K filing lists six additional U.S. patents in the Orange Book, with some extending protection until 2038. JPMorgan analysts express high confidence in a favorable outcome for Acadia in the upcoming appeal, citing previous court decisions and legal insights.
In light of these developments, JPMorgan has extended its Nuplazid loss of exclusivity assumption to 2038 from 2030. This change, alongside potential price negotiations and competitive threats from generic entrants post-2030, contributed to the revised price target. The company’s solid financial position is reflected in its $996.28 million trailing twelve-month revenue and healthy balance sheet, with more cash than debt. Discover detailed insights and expert analysis in Acadia’s Pro Research Report, available exclusively on InvestingPro.
In other recent news, Acadia Pharmaceuticals has made significant strides with recent developments. The company secured a favorable court ruling concerning its Nuplazid 34mg formulation, ensuring patent protection until 2038. This legal victory prompted Deutsche Bank (ETR:DBKGn) to upgrade Acadia’s stock rating from Hold to Buy, raising the price target to $35 due to the strengthened revenue outlook for Nuplazid. Additionally, BofA Securities increased the stock price target to $23, maintaining a Neutral rating, highlighting the importance of the court decision in securing long-term revenue potential.
Acadia Pharmaceuticals recently held its Annual Meeting of Stockholders, where three Class III directors were elected, and Ernst & Young LLP was ratified as the independent registered public accounting firm. In a strategic move, the company appointed Allyson McMillan-Youngblood as the new Senior Vice President of its Rare Disease Franchise, focusing on the growth of DAYBUE® and future product launches. Acadia also signed a lease for new office space in Princeton, New Jersey, intended for executive offices and research and development, demonstrating its commitment to expansion.
These developments, including the court ruling and strategic hires, are part of Acadia’s ongoing efforts to strengthen its position in the neuroscience and rare disease sectors. Deutsche Bank expressed confidence in Acadia’s pipeline, noting upcoming clinical trial data as potential catalysts for the company’s stock value. The firm’s new CEO, Catherine Owen Adams, has been credited with enhancing the company’s investment appeal.
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