Acadia Pharmaceuticals obliterated Wall Street's expectations for the launch quarter of its Rett syndrome treatment and, on Friday, ACAD stock hit a two-year high.
In its first quarter on the market, Acadia's Daybue brought in $21 million to $23 million in sales. Daybue is the only approved treatment for Rett syndrome, a rare genetic mutation that affects girls and causes impairments in speech as well as the ability to wake, eat and breathe easily. Analysts expected just $2.5 million in sales, according to SVB Securities analyst Marc Goodman.
Further, Acadia said it expanded its licensing agreement with Neuren Pharmaceuticals for the global rights to Daybue in Rett syndrome. The previous agreement only allowed Acadia to sell Daybue in North America. The new agreement could add $600 million to peak sales, Goodman said.
"Though we have consistently been positive on the (Daybue) opportunity, the rapid launch metrics are very encouraging for what many investors have viewed as an incremental product in this rare disease, so we are not surprised to see the positive stock reaction," he said in a report.
On today's stock market, ACAD stock launched 24.7%, ending the regular session at 32.18. The stock previously broke out of a flat base with a buy point at 26.04 on Wednesday, but closed below that point on Thursday. On Friday, Acadia stock easily retook that entry and surged into a profit-taking zone, MarketSmith.com shows.
ACAD Stock: Strong Daybue Guidance
The bevy of good news pushed Acadia shares to their highest point since March 2021.
Acadia's Daybue preannouncement essentially pulled forward all of Wall Street's expectations for 2023 sales of the drug into the second quarter alone, RBC Capital Markets analyst Gregory Renza said in a note to clients.
The company also guided to $45 million to $55 million in third-quarter sales of Daybue. Further, Acadia preannounced $140 million to $144 million in second-quarter sales of Nuplazid, its treatment for psychosis associated with Parkinson's disease. For the full year, Acadia expects that drug to generate $530 million to $545 million in sales.
"Big Daybue beat and encouraging third-quarter guidance set up a strong launch out of the gate," Renza said. "Daybue preliminary sales reflect favorable market uptake, driven by sound execution."
He kept his outperform rating on ACAD stock and boosted his price target to 33 from 28.
Expanding Into Fragile X
In addition to licensing the global rights to Daybue, Acadia also took on the global rights to another drug from Neuren. This drug could treat Rett and Fragile X syndromes. The latter is an inherited condition that causes development delays.
Acadia will pay Neuren — which trades in Australia — $100 million upfront. Neuren is also eligible for sales milestones and tiered royalties on both drugs.
SVB's Goodman raised his price target on ACAD stock to 36 from 25. He maintained his outperform rating on shares. He notes the broad opportunity in Rett syndrome is "meaningful," There are about 6,000 to 9,000 Rett syndrome patients in the U.S. The disease is more prevalent in Europe, but less so in Japan.
ACAD stock has a strong Relative Strength Rating of 94 out of a perfect 99. This means shares rank in the top 6% of all stocks when it comes to 12-month performance, according to IBD Digital.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
