It's an interesting time to be an investor in ACADIA Pharmaceuticals (NASDAQ:ACAD). The company is in the middle of transforming itself from a clinical-stage enterprise into a commercial one, which can be a tricky transition to execute successfully.
ACADIA is actively launching its new Parkinson's disease psychosis (PDP) drug, Nuplazid, which won FDA approval on April 29. PDP causes patients to experience hallucinations and delusions, which tend to increase in severity and frequency as the disease progresses. Dealing with these hallucinations often places a significant burden on caregivers and is a major reason that many patients with Parkinson's disease are ultimately forced into a nursing home.
It is estimated that 40% of people with Parkinson's disease develop PDP, and since Nuplazid is the first and only FDA-approved medicine in the indication, expectations are running quite high. That's especially true now that the company announced that the annual wholesale price of Nuplazid will be $23,400. Multiply that by the roughly 400,000 patients in the U.S. with PDP, and the peak sales numbers get big in a hurry.
ACADIA recently reported results from the second-quarter and held a call with the investment community to share more details about the company's performance. Here are a few choice quotes from the call that every ACADIA shareholder needs to know.
On the low Q2 sales figure
Ramping up sales of a new drug like Nuplazid will likely take some time. Healthcare providers often need to be educated about how the drug works before they will write a prescription, and payers need to provide formal access before patients can afford the drug. Since Nuplazid officially launched for sale on May 31, this quarter's results include only one month of sales data.
Net sales for the quarter came in at $97,000, which is quite a bit below the $810,000 that analysts were projecting. Steve Davis, ACADIA Pharmaceuticals' CEO, offered some more commentary about the low sales figure in the quarter:
Net product sales for the quarter were $97,000. As we previously described, physicians are able to prescribe to any patient a 30-day free trial, and the mechanism for doing this is built into the form physicians use to initiate the prescription to our new NUPLAZIDconnect site. To date, the vast majority of patients have received the 30-day free trial. Of course, when patients are taking free samples, this does not result in revenues. Having launched the drug on May 31, the $97,000 of revenues we recorded represents those patients who did not receive the free trial.
On building awareness
There's no doubt that ACADIA's primary focus right now is on building awareness and demand for Nuplazid. To do so, the company has hired and trained its own direct-sales team, who have started to target physicians across the country who treat patients with PDP.
Davis again gave more color on the company's launch plans and methods that they used during the quarter to spread the word:
Our speaker program and digital and media campaigns for NUPLAZID were initiated at the time of launch and are ongoing. We also had a strong presence at medical meetings with product symposia at the American Psychiatric Association Annual Meeting held in mid-May and at the 20th International Congress of Parkinson's Disease and Movement Disorders held in mid-June. We recently hosted a NUPLAZID national broadcast webinar featuring experts in the field of PD psychosis. Over 1,200 healthcare professionals participated in this national webinar broadcast.
Although the drug is still quite early into the launch, the company's initial marketing efforts appear to be working. Here's some recent market research that ACADIA's chief commercial officer, Terrence Moore, shared with investors:
Market research we recently conducted showed that the number of PD psychosis-treating physicians who recognize psychosis as a co-morbidity associated with Parkinson's disease has more than doubled from where the number was prior to when we began our disease awareness campaign in 2015. This research also showed that, of the PD psychosis prescribers who had been exposed to NUPLAZID information, 71% recalled that NUPLAZID is the first and only FDA-approved treatment for hallucinations and delusions associated with Parkinson's disease psychosis. And among those aware of NUPLAZID, 73% are familiar with its attributes.
On insurance coverage
Seeing physician awareness so high this early is an encouraging sign, but getting payers on board is equally important. Chief Commercial Officer Terrence Moore offered more details on how that is progressing:
In regards to the payer landscape, our account management team has made excellent progress in contacting and meeting with the payers covering the majority of plans responsible for covering the majority of PD psychosis lives and educating them on the benefits of NUPLAZID. In terms of formulary status and placement, as we shared previously, Medicare Part D payers have 90 days from the time the product is made available to review NUPLAZID and place the product on their formularies. Commercial plans can take up to six, nine months longer to take their formulary decisions, so it may be some time before we know our status there.
On future indications
PDP is an important indication for ACADIA, but the company isn't stopping there. Here's a look at the company's pipeline of projects.
As you can see, the company believes that pimavanserin (Nuplazid) could be useful in treating other diseases as well.
CEO Davis gave an update on future clinical work in this area:
We have completed enrollment in our Phase II exploratory study with pimavanserin for Alzheimer's disease psychosis and remain on track to announce top line results by the end of 2016. [...] Turning now Alzheimer's disease agitation, we look forward to initiating this Phase II study with pimavanserin in the second half of 2016. In addition to Alzheimer's psychosis and Alzheimer's agitation, we have additional clinical starts in other indications that we will announce by the end of this year.
There's no doubt that the growth opportunity in front of Nuplazid is huge, so if management can successfully execute on its commercialization plan then it wouldn't surprise me one bit to see the stock continue its winning ways from today's price. Any growth investors with a high tolerance for risk might want to put this stock on their radar.