One thing is clear to Uli Hacksell, chief executive of San Diego’s Acadia Pharmaceuticals (NASDAQ: [[ticker:ACAD]]): the market just doesn’t understand his company.
Just a couple of weeks ago, the life sciences startup got a strong vote of confidence from Canada’s Biovail, which paid $30 million upfront as part of a deal to develop a promising drug now in clinical tests for psychosis related to Parkinson’s disease. The announcement boosted the price of Acadia’s stock, which closed yesterday at $1.69 a share on below-average volume.
Still, many investors remain skeptical. Wall Street has assigned Acadia a market value of about $65 million, just a tad north of its total cash on hand. To the market, Acadia’s development program has little worth. “We don’t think this is logical,” Hacksell told me in a recent telephone interview. “Acadia, in fact, has some great assets.”
How great? The answer is a little more than four months away. That’s when the company expects to see the results of a late-stage trial for pimavanserin, Acadia’s drug candidate for Parkinson’s disease-related psychosis.
There are no approved drugs for the treatment of psychosis in Parkinson’s disease patients and the market is potentially large. An estimated 1.5 million Americans have Parkinson’s disease, and as many as 40 percent of them experience hallucinations or delusions, although the severity varies.
The international trial of 298 patients, which compares the effects of pimavanserin to a placebo, is one of two late-stage trials needed for FDA approval. Hacksell expects the second human test to be completed in the third quarter of 2010. If successful, FDA approval could come in 2011.
Acadia has big plans for pimavanserin. It also is preparing to test the drug as a treatment for psychotic symptoms in Alzheimer’s disease patients – a second substantial disease market. About 4.5 million Americans have Alzheimer’s, and Acadia estimates 25 to 40 percent of them have psychotic symptoms and could benefit from the drug. This, too, is a wide-open opportunity. No medications have been approved to treat Alzheimer’s-related psychosis. Although many patients receive antipsychotic drugs, a 2006 federal study found the medications were risky to