Acadia Pharmaceuticals notched a win in a patent battle Wednesday pertaining to its Parkinson's drug, Nuplazid. ACAD stock soared to a four-month high.
MSN Laboratories is trying to make a low-cost generic version of Nuplazid. But a judge granted Acadia's motion for a summary judgment on Wednesday.
This "marks a win for Acadia and further defends Nuplazid's future market opportunity in Parkinson's disease psychosis," RBC Capital Markets analyst Gregory Renza said in a report. "While shares moved strongly to the upside on the news, we anticipate settling at this level as investor refocus on the broader Acadia story, with downside protection now in place."
On the stock market today, ACAD stock rocketed more than 34.5% to 28.47 Biotech stocks collectively moved more than 2% higher.
ACAD Stock: Cashing In On Nuplazid
Nuplazid is an important drug for Acadia. It's currently approved to treat patients with psychosis due to Parkinson's disease. In the September quarter, Nuplazid brought in $144.8 million in sales, accounting for more than 68% of total sales.
But the company is also studying the same drug, known by the test name pimavanserin, in patients with negative symptoms of schizophrenia. These include the inability to feel happiness, apathy, social isolation and lack of energy. Acadia expects to have the first results from a Phase 3 study in 2024.
In addition to the positive court action vs. MSN Labs, court filings show Acadia has also resolved patent disputes with other generic developers, ACAD stock analyst Renza said.
"The outcome tracks well with our expectations of a win for Nuplazid and previous check-ins with Acadia management following oral arguments on Sept. 27, which instilled confidence, as the summary judgment hearing was anticipated to ultimately protect Nuplazid's exclusivity," he said.
Focus Turns To Daybue
He notes ACAD stock investors are now closely focused on Daybue, Acadia's second drug. It gained Food and Drug Administration approval this year to treat patients with Rett Syndrome. Rett Syndrome is a genetic neurological disorder that causes progressive loss of motor skills and language.
Daybue sales easily beat expectations in the third quarter.
"Though sustainability and sequential will be top of mind into 2024," Renza said.
He kept his outperform rating and 33 price target on ACAD stock.
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