- The Food and Drug Administration has turned down a request to approve pimavanserin, a medicine from Acadia Pharmaceuticals, for patients with dementia-related psychosis. Acadia said the rejection was tied to issues with the main study used in its approval application.
- Investors have been bracing for a rejection since last month, when Acadia revealed the FDA apparently couldn't discuss marketing requirements because of "deficiencies" in the company's application. Acadia executives said they were surprised by this update, given the agency had on two occasions found no problems with the submission.
- Speaking with investors Monday, executives explained the issue seems to be a late-stage study named HARMONY. Though the study hit its main goal, regulators don't think there's enough evidence to grant an approval. According to Acadia, the FDA focused on how the drug didn't outperform placebo in some groups of patients, and how the study didn't enroll enough patients with less common dementia types.
Acadia's business largely revolves around pimavanserin, which was first approved by the FDA in 2016 to treat the hallucinations and delusions associated with Parkinson's disease psychosis. Sold as Nuplazid, the drug was responsible for all of Acadia's $442 million in total revenue last year.
The company has since tried to grow pimavanserin sales by getting it cleared for use in other diseases. Dementia-related psychosis, which carries similarities to the drug's original indication, has been a prime target, especially since the HARMONY study generated positive results. In fact, Acadia was able to stop the study early because patients were going noticeably longer without a psychosis relapse when treated with its drug versus placebo.
Acadia asked for approval in dementia-related psychosis last June, with a decision expected by April. But approval odds appeared to dim last month, once it became clear the FDA had identified issues with Acadia's application.
Though perhaps expected, Monday's rejection still unnerved investors. Acadia's share price dropped nearly 17% on the news to trade at around $21.50. Since the start of the year, it's fallen 60%.
Vamil Divan, an analyst at Mizuho Securities, noted how the issues laid out by Acadia "may be more significant, and may take longer to resolve, than some had hoped."
"Based on the wording in the press release, it appears that the company may need to do at least one, if not two, additional clinical trials in order to obtain approval for this important indication," Divan wrote in an April 5 note to clients.
On their end, Acadia executives maintain that the FDA didn't until recently have concerns about the HARMONY study taking a broad look at dementia patients. CEO Steve Davis said the rejection letter was the first time he and his team had heard that the agency's Division of Psychiatry wanted to see statistically significant results across the different subtypes of patients.
"This is very disappointing, and it's not consistent with our agreements with the division on the pivotal study designs," Davis said on the Monday morning call with investors.
Acadia plans to meet with the FDA to discuss the rejection and develop a "expeditious path forward" toward an approval.