What happened

After CNN published a news report that highlights a growing number of patient deaths and adverse events that may be related to the use of the drug Nuplazid, shares of Acadia Pharmaceuticals (ACAD 3.73%), a commercial-stage drugmaker focused on diseases of the central nervous system, fell 22% as of 10:45 a.m. EST Monday.

So what

Every shareholder of Acadia should read the entire CNN article, but here is a summary of the key points:

  • More than 1,000 patients have continued to experience hallucinations while taking Nuplazid.
  • More than 700 patients taking Nuplazid have died since the drug was launched. Nuplazid was listed as "suspect" in at least 500 reported cases.
  • Some physicians and medical experts told CNN that they were worried Nuplazid was "approved too quickly, based on too little evidence that it was safe or effective." 

Understandably, this news isn't sitting well with traders, which is why shares are plunging today.

A person wearing a suit sitting next to a laptop with their hands on their head and a worried look on their face.

Image source: Getty Images.

Acadia's management team responded to this news report with a few key points of its own:

  • Patients who develop Parkinson's disease psychosis (PDP) tend to be older and are chronically ill. They also tend to be on many different medications and show numerous medical comorbidities. These factors are associated with a high risk of morbidity and mortality.
  • Acadia regularly monitors the mortality risk for Nuplazid and reports data to the FDA each quarter. Since launch, the overall mortality rate of patients who use Nuplazid is 12.4 deaths per 100 patient years. That's less than half of the 28.2 deaths per 100 patient years that is observed in the PDP population in general.
  • The FDA has not identified a specific safety issue that is not already described in Nuplazid's labeling.
  • Acadia has conducted two studies that involve more than 300 patients with Alzheimer's disease since the drug's approval in 2016. In these studies, there was no difference in the number of deaths reported among patients who use Nuplazid or a placebo.

Now what

It is hard to know what to make of this report. On one hand, this article raises some real concerns and it is difficult to read that so many patients have died while using Nuplazid. On the other hand, it is important to remember that patients who develop PDP are extremely sick and have a high risk of mortality whether or not and they choose to use Nuplazid.

Investors will have to decide for themselves whether or not they feel comfortable continuing to own shares. Either way, I'd advise them to monitor this story as it continues to develop.