Shares of Acadia Pharmaceuticals plunged more than 15% in early trade on Monday after the biopharmaceutical company received a Complete Response Letter (CRL) from the US Food and Drug Administration (FDA), which rejected the supplemental New Drug Application (sNDA) for NUPLAZID (pimavanserin). The therapy was designed for the treatment of hallucinations and delusions associated with dementia-related psychosis (DRP).
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The CRL indicated that the application cannot be approved in its present form as it lacks substantial evidence of effectiveness to support approval, despite prior agreements with the Division of Psychiatry regarding the pivotal Phase 3 HARMONY study design targeting a broad DRP patient population analyzed as a single group, Acadia (ACAD) said.
The CRL also stated that the Division considers the Phase 2 Alzheimer’s disease psychosis study -019, a supportive study in the sNDA filing, as inadequate and uncontrolled. According to the letter, it was a single center study with no type I error control of secondary endpoints, in which certain protocol deviations were visible. (See Acadia stock analysis on TipRanks)
However, the company believes that these observations have no impact on the positive results regarding the study’s primary endpoint and overall conclusions of efficacy. It should also be noted that the CRL did not indicate any safety concerns.
Acadia CEO Steve Davis said, “We will immediately request a Type A meeting to work with the FDA to address the CRL and determine an expeditious path forward for the approval of pimavanserin in DRP.”
On March 10, Merrill Lynch analyst Tazeen Ahmad downgraded the stock to Hold from Buy.
The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 14 analysts suggesting a Buy and 5 analysts recommending a Hold. The average analyst price target of $43.44 implies around 69.8% upside potential to current levels.
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