After releasing encouraging data from an important Phase II clinical trial, shares of Acadia Pharmaceuticals (NASDAQ:ACAD) rose by 14% as of 10:10 a.m. EST on Tuesday.
Acadia released top-line results from its Phase II -019 Study today. This trial was designed to test its drug Nuplazid (pimavanserin) as a hopeful treatment for Alzheimer's disease psychosis.
The results from the six-week, placebo-controlled study showed that Nuplazid met its primary endpoint, which was a statistically significant reduction in psychosis as measured by the Neuropsychiatric Inventory-Nursing Home (NPI-NH) Psychosis score. Patients who used Nuplazid showed a 3.76 point improvement on the test while the placebo group only showed a 1.93 point improvement (p=0.0451).
Acadia's CEO Steve Davis was quite pleased with the study's results, noting:
Data from the -019 Study provide solid evidence that pimavanserin can improve psychosis in another major neurological disorder and provide strategic momentum for the further development of pimavanserin to address the needs of AD Psychosis patients.
Given the terrific clinical result, it is easy to understand why traders are bidding up shares today.
The FDA has not yet approved any drug to treat Alzheimer's disease psychosis, so this news is extremely promising for investors and patients alike. Roughly five million Americans suffer from Alzheimer's disease and somewhere between 25% and 50% of them experience symptoms of psychosis. Thus, if Nuplazid can ultimately go on to win a label expansion claim for this indication then it could be quite lucrative. After all, Nuplazid's wholesale price is $23,500 per year, so even capturing a small fraction of the total addressable market could lead to blockbuster sales.
Of course, this data was only from a Phase II trial, so Acadia still has a long road ahead before it can potentially submit for regulatory review. Still, this is terrific news all around, so it is hard to blame the markets for bidding up shares today.
Brian Feroldi has no position in any stocks mentioned. Like this article? Follow him on Twitter where he goes by the handle @Longtermmindset or connect with him on LinkedIn to see more articles like this.
The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
More from The Motley Fool
3 Keys for Acadia Pharmaceuticals to Succeed in 2018
Acadia CEO Stephen Davis outlines the path to success for the biotech at the J.P. Morgan Healthcare Conference.
Here's How Acadia Pharmaceuticals Crushed It in 2017
Nuplazid's sales are soaring, but Acadia's stock price hasn't responded in kind. Is that mismatch creating a buying opportunity for investors?
3 Stocks That Turned $8,000 Into at Least $138,000 in 5 Years
Some stocks have outperformed the market, and then there's MGP Ingredients, Acadia Pharma, and Netflix.