Ahead of the Bell: Acadia Pharmaceuticals

Analysts turned their attention to Acadia Pharmaceuticals Inc.'s future and its drug candidate pimavanserin Tuesday, a day after the company reported the failure of another schizophrenia drug.

At least three analysts downgraded the stock Monday and Tuesday, after Acadia said ACP-104 was no better than a placebo at treating schizophrenia. Pimavanserin is the company's lead drug, but according to David Amsellem of Friedman Billings Ramsey, it is less valuable because it is an adjunct, or combination, therapy, while ACP-104 would have been a primary treatment for schizophrenia.

Acadia said it will probably end development of the ACP-104.

Results from a trial of pimavanserin in Parkinson's disease psychosis are expected in 2009, and Amsellem thinks the drug will be launched as a schizophrenia treatment in 2011. The San Diego company probably won't be able to start a schizophrenia trial for pimavanserin until next year, he said.

Amsellem said Acadia believes it has enough funding to get through the end of next year, but Eun Yang of Jefferies said it could have financial trouble by the end of 2009. ACP-104 was not a big part of the stock's value, she said, but after Monday's failure, she saw little reason to own the stock.

It is not clear how close the company might be to finding a partner to help develop pimavanserin, she added.

Amsellem cut his price target to $8 per share from $21, and Yang reduced hers to $4 from $14. Banc of America Securities analyst William Ho downgraded the stock to "Sell" from "Buy."

Acadia stock plunged 43.1 percent Monday, hitting an all-time low of $4.30 before recovering to $4.83.