- Acadia Pharmaceuticals saw its share price cut almost in half Tuesday morning, following news that the company's drug approval application has run into an unexpected and potentially significant obstacle.
- Acadia said that, since submitting the application last June, the Food and Drug Administration has consistently found no issues with it. That was, until last week, when the FDA informed Acadia about "deficiencies" which prevent the discussion of marketing requirements at this time. While not an outright rejection, the agency's feedback appears to have significantly lowered the odds of approval.
- The drug in question, called pimavanserin, has been on the market for several years, sold under the brand name Nuplazid for the treatment of Parkinson's disease psychosis. With its application, Acadia had hoped to expand the pimavanserin label to include dementia-related psychosis — a condition which, estimates hold, affects millions of people.
In 2016, after more than a decade of clinical testing, Acadia scored its first product in Nuplazid, which remains the only FDA-approved treatment for hallucinations and delusions experienced by some Parkinson's patients. Net product sales from Nuplazid totaled $442 million in 2020, an increase of 30% from 2019.
But in the years since Nuplazid's launch, Acadia, which works in the high-risk, high-reward area of brain drug research, has had trouble locking down another approval. It wanted to get pimavanserin cleared for schizophrenia patients who don't respond well to antipsychotic therapy, but disappointing results from a late-stage study set that program back.
Acadia has fared better testing pimavanserin against dementia-related psychosis, which carries similarities to the drug's original indication. In fact, Acadia stopped a late-stage study in that population early, after an independent group monitoring the trial found clear signs the drug was working.
The company went on to seek approval of pimavanserin in dementia-related psychosis, and expected to hear the FDA's decision by early April.
The agency's latest feedback, though, indicates that Acadia's attempts to grow the pimavanserin brand will likely face another setback. Investors appear to be bracing for a full rejection, as Acadia's share price plummeted from $46 Monday afternoon to about $24 Tuesday morning.
"We were extremely surprised and disappointed to receive such a communication from the FDA, and to receive it so late in the review cycle," Steve Davis, Acadia's CEO, said during an unusually forthcoming call with investors on Monday.
According to Acadia, the FDA had twice communicated there were no potential issues with the supplementary application. The first of those communications happened last July, when the agency agreed to evaluate the drug, and then again in December during the middle of its review.
What's more, Acadia claims the FDA did not want to hold a meeting in which outside experts go over the application and make recommendations about whether to approve or reject it. Such meetings are typical when the FDA has outstanding questions or concerns about a drug's benefits and risks.
On the investor call, Acadia executives said the FDA hasn't yet specified what problems were found in the application, much to the company's frustration.
"We immediately and repeatedly have been pushing the FDA. We escalated the issue," Davis said on the call. "We just don't have any feedback from them yet. They told us twice they don't have any additional questions for us, and that's where things stand at the moment."
Though Acadia said it intends to work with the agency to resolve the apparent issues, analysts don't expect a positive turnaround before the April 3 approval deadline.
"It appears the review process was proceeding as expected," wrote Vamil Divan of Mizuho Securities, in a note to clients, "so it is unclear to us what led to the FDA's questions at this time."
Divan and his team now believe the odds that pimavanserin gets approved in dementia-related psychosis are lower — at 70% versus 80% previously — and expect the drug's launch to be pushed back one year.