Pharmaceuticals Acadia (ACAD) dashed Wall Street expectations for the launch quarter of its Rett syndrome treatment and on Friday ACAD stock hit a two-year high.
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In its first quarter on the market, Acadia’s Daybue had sales of $21-23 million. Daybue is the only approved treatment for Rett Syndrome, a rare genetic mutation that affects girls and causes speech problems as well as the ability to wake up, eat and breathe easily. Analysts were expecting just $2.5 million in sales, according to SVB Securities analyst Marc Goodman.
Additionally, Acadia said it has expanded its licensing agreement with Neuren Pharmaceuticals for worldwide rights to Daybue in Rett syndrome. The previous agreement only allowed Acadia to sell Daybue in North America. The new deal could add $600 million to peak sales, Goodman said.
“While we have always been positive about the (Daybue) opportunity, the rapid launch metrics are very encouraging for what many investors have seen as an additional product in this rare disease, so we are not surprised to see the positive reaction of equities,” he said. said in a report.
In today’s stock market, ACAD stock launched 24.7%, ending the regular session at 32.18. The stock had previously come off a flat base with a buy point at 26.04 on Wednesday, but closed below that point on Thursday. On Friday, Acadia stock easily picked up that entry and jumped into a take-profit zone, MarketSmith.com shows.
ACAD action: strong Daybue orientation
The flurry of good news pushed Acadia shares to their highest level since March 2021.
Acadia’s Daybue pre-announcement essentially pushed all of Wall Street’s expectations for the drug’s 2023 sales to just the second quarter, RBC Capital Markets analyst Gregory Renza said in a note to clients.
The company also guided between $45 million and $55 million in Daybue sales in the third quarter. In addition, Acadia pre-announced sales of Nuplazid, its treatment for psychosis associated with Parkinson’s disease, of between $140 million and $144 million in the second quarter. For the full year, Acadia expects the drug to generate sales of $530 million to $545 million.
“Big Daybue beat and encouraging third quarter guidance set up a strong launch,” Renza said. “Preliminary Daybue sales reflect favorable market adoption, driven by strong execution.”
He kept his outperformance rating on ACAD stock and raised his price target from 28 to 33.
Expansion in Fragile X
In addition to licensing worldwide rights to Daybue, Acadia has also acquired worldwide rights to another drug from Neuren. This drug may treat Rett and Fragile X syndromes. The latter is an inherited disease that causes developmental delays.
Acadia will pay Neuren – which is trading 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 from 25 to 36. He maintained his outperform rating on the stock. He notes that the vast opportunity of Rett syndrome is “significant”. There are approximately 6,000 to 9,000 patients with Rett syndrome in the United States. 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. That means the stocks 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.
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